• Pension/Retirement Plans in India

    Life Insurance
    • Premiums as low as Rs.17/day for sum assured of Rs.1 crore*
    • Claim up to Rs. 1,50,000 deduction under section 80C**
    • Choose between annual and monthly premium payment options

    What is an Annuity/Pension Plan?

    A pension plan is a type of savings or investment plans which you can avail for yourself so that you can live a standard life after retirement. A pension plan accumulates a part of your savings for over a period of time which you can finally use after you have retired.

    After years and years of hard work, retirement is a phase most of us look forward to in our lives. While retirement is supposed to be the most peaceful phase of our lives, one must also be aware of the fact that one’s regular monthly income comes to a stop during this time. If you have not planned for this during your productive years, you might end up facing various financial difficulties in your life.

    This is where an annuity or pension plan comes into play. One of the major benefits of a pension plan is that it provides regular income to the policyholder even after his/her retirement. If you are worried about your monthly expenditure following retirement, you must invest in a pension plan and build a corpus large enough to take care of your requirements.

    Pension plans typically come in many forms, and they offer flexible benefits to policyholders depending upon their requirements. Customers can choose between unit-linked retirement plans or endowment plans based on their risk appetite. Most of the insurers in the market have multiple variants of pension plans to reach out to a wide range of customers. Also, customers can choose between single premium pension plans and regular premium pension plans based on their requirements.

    By starting the investment early during the productive years of their life, people can build a large corpus with only a small portion of their annual income. Alternatively, they can also pay a lump sum single premium amount and get regular income from the investment. Most pension plans allow customers to choose the age at which the annuity can begin.

    Best Pension Plans in India 2023:

    There are over 20 life insurers that offer different variants of pension plans in India. These plans come with flexible benefits depending upon the requirements of customers. Based on their specific retirement goals, customers can pick the right plan that caters to their needs. Listed below are some of the top pension plans in India as of 2023:

    Pension Plan About the plan Entry Age Vesting Age Policy Term Annual Premium Amount Sum Assured
    LIC New Jeevan Nidhi Plan A conventional ‘with profits’ pension policy that offers both savings and protection benefits. Bonus is accrued after the 6th year, with the premium paid eligible for tax exemption under the Income Tax Act. Minimum: 20 years Maximum: 58 years (regular premium), 60 years (single premium) Minimum: 55 years Maximum: 65 years Minimum: 5 years Maximum: 35 years As per the policy document Minimum: Rs.1 lakh (regular premium), Rs.1.5 lakh (single premium)
    SBI Life Saral Pension Plan A plan which offers guaranteed bonus ranging between 2.50% and 2.75% during the first five policy years. It also provides an option to avail enhanced coverage by purchasing the SBI Life – Preferred Term Rider. Minimum: 18 years Maximum: 60 years for regular premium policies, 65 years for single premium policies. Minimum: 40 years Maximum: 70 years Minimum: 5 years for single premium policies, 10 years for regular premium policies Maximum: 40 years. Minimum: Rs.7,500 Maximum: No upper limit Minimum: Rs.1 lakh Maximum: No upper limit
    HDFC Life – Click2Retire Plan An online pension plan which secures the retirement of an individual through assured vesting benefit. Being a unit linked plan it invests in funds which meet certain growth requirements Minimum: 18 years Maximum: 65 years Minimum: 45 years Maximum: 75 years Minimum: 10 years Maximum: 35 years Minimum annual premium: Rs.24,000 Maximum: No upper limit. Based on premium
    LIC Jeevan Akshay VI Plan An immediate annuity plan which provides pension immediately after paying the single premium. Minimum: 30 years Maximum: 85 years/100 years (based on the annuity option chosen). Pension is paid immediately, depending on the option chosen by the buyer NA Minimum: Rs.1 lakh for offline distribution channels, Rs.1,50,000 lakh for online distribution channels Maximum: No upper limit Based on premium
    ICICI Pru-Easy Retirement Plan (Regular Premium) A unit linked plan which provides an assured benefit to help meet financial requirements after retirement. Minimum: 35 years Maximum: 70 years Minimum: 45 years Maximum: 80 years Minimum: 10 years Maximum: 30 years Minimum: Rs.48,000 Maximum: No upper limit Based on premium
    Reliance Smart Pension Plan This is a non-participating unit linked plan which offers a regular source of income after an individual retires. Minimum: 18 years Maximum: 65 years Minimum: 45 years Maximum: 75 years Minimum: 10 years for single premium policies, 15 years for limited and regular premium policies Maximum: 30 years Varies based on the premium payment term, premium payment mode, etc. Based on premium
    Bajaj Allianz Pension Guarantee Plan This is an immediate annuity policy that provides policy buyers with an option to choose between 6 payout modes. Minimum: Varies based on the payout mode chosen. Ranges from 0 years to 37 years. Maximum: 80 years Varies based on annuity option chosen NA Minimum: Rs.25,000 Maximum: No upper limit Based on premium
    Max Life Guaranteed Lifetime Income Plan This is a non-linked, non-participating plan which offers a lifetime pension to policyholders. Minimum: 50 years (55 years for plans that are sourced under QROPS) Maximum: 80 years NA Annuity is offered for the annuitant’s lifetime NA Based on premium
    Aditya Birla Sun Life Empower Pension Plan This is a unit linked non-participating plan which offers a death benefit in addition to annuity. Minimum: 25 years Maximum: 70 years Maximum: 80 years Minimum: 5 years Maximum: 30 years Minimum annual premium: Rs.18,000 Maximum: No upper limit Based on premium
    HDFC Life Assured Pension Plan-ULIP This is a unit linked plan which is suited to those looking at an investment cum protection plan. Minimum: 18 years Maximum: 65 years Minimum: 45 years Maximum: 75 years Minimum: 10 years Maximum: 35 years Minimum annual premium: Rs.24,000 Maximum: No upper limit Based on premium

    Types of Pension Plans in India:

    Pension Plan

    Insurance companies offer a range of pension plans in India, and while each is unique in itself, one can classify pension plans into these 7 broad categories:

    1. Immediate Annuity Plans– These are plans which provide immediate pension payouts, with no waiting period to receive the pension. Most plans under this category require the premium to be paid as a single lumpsum amount, with the option to choose the time from which the annuity payout begins. Example: LIC Jeevan Akshay VI.
    2. Deferred Annuity Plans – These are plans wherein the policyholder receives a pension after a specified period of time. He/she is expected to pay premiums for the policy term, with the payment beginning once the premiums are paid. One can also choose to make a single premium payment. One can choose the frequency of annuity payout, with insurers providing the option to pay it monthly, quarterly, half-yearly, or yearly. Example: LIC Jeevan Nidhi Plan.
    3. Life Annuity Plans – These plans pay pension to the insured individual until his/her death, thereby ensuring that one has a regular source of income throughout his/her life. One can also choose to include their spouse under the plan, in which case the spouse continues to receive the pension after the policyholder passes away. Example: SBI Life Annuity Plus.
    4. Guaranteed Period Annuity Plans – These are plans akin to life annuity plans, with the only difference being that they pay assured pension for a specific period of time, even if the policyholder passes away before this period.
    5. Traditional Pension Plans – These are plans which invest the premium in safe options like government securities. These are generally risk-free, but offer lower returns. Example: SBI Life Saral Pension.
    6. Unit Linked Pension Plans – These are plans which invest in market units such as stocks, securities, or bonds. They have a degree of risk associated with them but typically offer better returns. Example: HDFC Life Assured Pension Plan.
    7. With/Without Cover Pension Plans – A with cover pension plan provides life cover in addition to annuity. These plans offer a death benefit in the event of demise of policyholder. A without cover plan does not offer life insurance, providing just annuity. Most plans can be enhanced to include life cover by adding riders.

    Why do I need a Retirement Plan?

    It is easy for one to overlook the fact that retirement brings with it financial strain. We work for a majority of our life hoping to lead a stress-free retired life, but lack of money could see one coming out of retirement to make ends meet. A good pension plan ensures that one is financially secure during retirement, with the plan providing a steady inflow of funds.

    Old age is often associated with increased medical expenses, which can be a strain on financial resources, especially when one is retired. While those with a government job would receive regular pension, this might not be sufficient for the daily needs. A pension plan can enhance this income, ensuring that one doesn’t have to make changes in their lifestyle.

    Additionally, pension plans can offer decent returns on investment, ensuring that inflation doesn’t reduce the value of one’s money. Certain pension plans also provide life cover, wherein the family of the insured is protected in the event of his/her demise.

    The biggest factor which warrants the need of a pension plan is the peace of mind which it provides, ensuring that we can have a peaceful and fulfilling retired life without the strain of finances on our head.

    Features of Pension Plans:

    Some of the popular features of pension plans are highlighted below:

    • Annuity options – Most pension plans come with a range of annuity options. One can choose an option which best suits their retirement needs.
    • Early payouts – One can opt to receive the payout at an age of their choosing. Certain plans provide regular payouts from the age of 40 years, providing an option for early retirement.
    • Flexible payments – One can choose the frequency at which they receive their pension. Most policies offer the option to choose between annual, monthly, half-yearly, or quarterly payout.
    • High pension – One can choose the amount of pension they wish to receive. Most insurers do not have an upper limit on the sum assured, thereby enabling one to plan their retired life according to their lifestyle.
    • Additional security – One can opt for riders to enhance the protection offered by a basic annuity plan. These riders can be purchased at affordable rates and are ideal for those looking for additional benefits.
    • Rebates/Incentives – Most insurance companies offer rebates/incentives on premiums which exceed a certain limit. This helps in getting more pension at cheaper rates.
    • Financial independence – Retired individuals with a good pension plan need not depend on others to meet their financial requirements.
    • Protection for family – One can choose to enhance a plan by opting for life cover, wherein a death benefit will be paid to the nominee after the policyholder dies. Additionally, they can also choose to cover their spouse under a plan.

    Types of Pension Plans With Tax Benefits 2019

    It is important that you consider your future needs and goals and based on that decide whether you need a pension plan or not. There are different types of pension plans that you can purchase depending on your long-term goals and financial capabilities. Here we will look at the types of pension plans that you can purchase for yourself.

    There are two types of retirement plans that you can purchase for yourself:

    • Work-based pension plan
    • Personal pension plan

    Work-based pension plan

    This is a type of pension plan where your employer is the master policyholder. In this type of plan, both you (employee) and the employer contribute a specific amount of money into a fixed fund on a monthly basis. These contributions would be helpful to you after you have retired from your job. Your end of the contribution is deducted from your salary.

    There are three types of work-based pension plans that you can come across:

    • Money purchase or defined contribution plan: The benefits that you will receive will be based on the contributions made by the employer and the employees on a monthly basis. The performance of the funds in which the contributions will be invested will also decide the benefits that you will be eligible to receive.
    • Defined benefit: In this type of benefit, the pension that you will receive will be based on factors such as your annual salary, the number of years left for you to retire, etc.
    • Hybrid plan: This type of plan is a mixture of both definite pension plan and defined contribution plan.

    Personal pension plan

    Personal pension plans are those types of plans which you can purchase personally depending on your future goals and financial capabilities. Unlike work-based pension plans, you can choose the contribution amount and the funds in which you would like to invest your money. You can also choose the cover amount depending on factors such as your age, financial capabilities, future goals, annual income, etc. There are different types of personal pension plans which you can invest in depending on your needs:

    • Immediate annuity plan: In this type of annuity plan, you pay a lump-sum amount following which you will immediately start receiving the pension amount. You can also choose the frequency at which you would like to receive the pension which can be yearly, half-yearly, quarterly, or monthly. This type of plan is ideal for you if you do not want to wait to receive your pension, or if you are about to retire. The only drawback that this type of plan presents is that once you have invested in an immediate annuity plan, you cannot cancel the plan or opt out of it.
    • Deferred annuity plan: These types of plans can be viewed as normal retirement plans. In this type of plan, you accumulate your savings for a fixed period of time. Once your policy attains maturity, you begin to receive your pension. For example, if you buy a pension plan with a policy term of 20 years, you start receiving your pension only after the policy term of 20 years has been completed and has attained maturity. You will decide the annuity when you purchase this type of plan where you will have the option of paying your premium either as a regular premium or as a single premium depending on the options available and your financial capability. There are two types of deferred annuity plans that you can purchase for yourself:
    • Traditional retirement plans: Under this type of plans, a part of your savings is invested in low-risk tools mainly debt instruments such as government risks. This type of plan is suitable if you don’t like taking too many risks. Due to the low-risk factor, the returns are decent in nature.
    • Unit-linked pension plans: Under this type of plans, a part of your savings is invested in different market instruments such as equity, mutual funds etc. This type of policy promises high returns and is suitable for you if you like to take risks by investing your money in high-risk instruments.
    • Pension plans with/without life cover: Under this category, there are 2 types of pension plans that you can purchase:
    • Pension plan with cover: In case you die when the policy term is still in force, your nominee will receive the cover amount fixed by you when you had initially purchased the plan.
    • Pension plan without cover: In case of your death provided that the policy is still in force, your nominee will receive the corpus amount built by you till date. As the name suggests, there is no sum assured that your beneficiary will receive except for the corpus amount.
    • Tax benefits Pension Plans
    • One of the biggest advantages of purchasing a pension plan is that it allows you to receive various tax benefits. According to Section 80CCC of the Income Tax Act, 1961, you can enjoy tax benefits on the investments you have made to your retirement fund. You are also allowed to withdraw one-third of your corpus under certain pension plans in case you have any financial need and you won’t have to pay any taxes on it.
    • You can purchase a pension plan if you have long-term goals to take care of. Pension plans allow you to achieve your financial goals even when you have stopped working. However, it is important that you are extremely clear regarding your future needs. You must properly research and compare various plans, and only when you are sure should you purchase a pension plan which you believe will be suitable for you.
    • Benefits & Advantages of Annuity/Pension Plans:
    • Listed below are the benefits/advantages which pension plans provide:
    • Tax benefits – The premiums paid towards a pension plan are eligible for tax benefits under Section 80CC and Section 10(10A) of the Income Tax Act. These can help one save a considerable amount on tax each year.
    • Investment – Certain unit linked retirement plans provide one the opportunity to grow their money through strategic investments. These offer dual benefits of an investment plus insurance.
    • Assured benefits – A number of pension plans offer bonuses/assured benefits, helping one meet any additional financial obligations post-retirement.
    • Death benefit – One can supplement the basic pension plan by opting for a life cover wherein a death benefit will be provided to the nominee of the insured after his/her demise.
    • Regular income – Pension plans provide a regular source of income to policyholders, ensuring that they can lead a hassle-free retired life.
    • How To Choose The Right Annuity Plan?
    • Choosing a good pension plan is critical to plan for retirement. Given the number of options available, one might get confused and opt for a plan which doesn’t conform to their needs. Listed below are a few simple points to consider before choosing a pension plan.
    • Know your requirements – It is important to compute the financial net one might need after retirement. Individuals with additional sources of income (rent, government pension, etc.) could opt for a plan which supplements this income. Individuals who will solely rely on the pension they receive through a pension plan must plan their needs down to last detail. Failure to do this could result in purchasing a plan which offers funds which are insufficient to meet basic requirements.
    • Basic pension or investment? – Choose whether you wish to just receive pension or whether the pension plan should double as an investment. There are numerous plans which invest in securities, bonds, stocks, etc. to offer higher returns.
    • Flexibility – Choose a plan which offers flexibility in terms of payments. Choosing a plan which offers yearly payouts without the option to change this could result in lack of money during emergencies.
    • Minimum assurance – Opt for a plan which offers a minimum assurance on the premium paid by you. This ensures that the money invested in a policy does not shrink after a specific period of time.
    • Premium – Choose a plan whose premium you can afford. Opting for a plan with a high premium could land you in trouble if you have an emergency and are unable to pay the amount on time.
    • Plan your retirement – Choose a plan which could offer you pension from the day you retire. There are certain plans which start payments only after a certain age is attained. These could pose a problem in case of early retirement.
    • Additional protection – Opt for a plan which provides additional protection to you and your family. The plan should have the option to be enhanced with a rider to cover the spouse.
    • Consult an expert – Individuals who have no idea about how pension plans work should consult an expert. One could also visit neutral websites to know the various benefits offered by a plan in order to understand it.
    • Compare – One should always compare plans from different insurers. This could help in getting a better deal, ensuring that they save money.
    • How To Plan Your Retirement Using Pension Plans
    • More often than not we are told to enjoy the moment. It is essential to do so and we all love to expend on an occasional trip, a car, an electronic gadget, etc. We like to make the most of what we have and spend on things we love. Along with the present expenditures, there is no harm in saving up some money to spend in the future too. Various insurance companies, today, offer pension plans that help individuals plan a comfortable tomorrow. Each of the plans come with unique features that you can choose based on your requirements, income and age.
    • Planning your retirement is no rocket science. All you need is a plan and some financial help.
    • Purchase a pension plan right away: Making an early start will help individuals enjoy more benefits, thanks to the power of compounding. An individual who purchases a 35-year pension plan at the age of 25 will most definitely have a larger retirement corpus than an individual who purchases a 25-year plan at the age of 35. This is so because of the obvious fact that funds accumulate since it is compounded at a certain rate of interest every year. The difference can be found not only in plans that differ by 10 policy years as mentioned above but as many as 5 years too. So, go ahead and purchase a pension plan today in order to have a peaceful tomorrow.
    • Chalk out a plan: You can buy a pension plan based on how you dream of spending your post-retirement life. If you wish to live in comfortable space and go on a trip once a year, you should make a financial plan based on such ideas. You may also want to take into consideration your day-to-day expenses and expenditures of a dependent spouse too. Apart from these, you should ideally set aside a certain sum for medical emergencies.
    • Seek help from a financial expert: After you have planned how you want to spend your twilight years, you can contact a financial expert to help you choose the best pension plan based on the inputs given by you. While you make the plan as to how exactly you wish to live your later years, the financial expert will translate them to numbers. He will narrow down on a few pension plans and advise you to buy a plan that best suits your requirement and is affordable in terms of your present-day income.
    • Review your pension plan from time to time: The process does not end at just purchasing a pension policy. In order to make sure one’s investments will give good returns, it’s important to track the plan regularly. You may need your financial expert to help you out with this as well. If you have chosen a ULIP (Unit linked insurance plan), the expert will make sure that your investments are performing well. If not, he will switch the fund type or allocate small sums in 2-3 different fund types. Also, he can make certain alterations based on your change in plan, if any, for your retirement years.
    • Avoid spending your savings: It is important to exercise restraint when it comes to spending money that you have invested for the future. While certain pension plans have the option of availing loans, avoid doing so unless absolutely necessary. If you face an emergency, withdraw the amount you require only after making sure you’ve exhausted all other options. As long as you avoid touching your pension funds, you will most definitely achieve saving up huge money that you can enjoy in the future.
    • By making the right plan and purchasing the best pension plan, you are sure to lead a blissful post-retirement life without having to worry about making ends meet or letting go of things you dream to do.
      • NOT TO BE MISSED..

        The missing links in pension schemes in India

        There are various people in India who are above the age of 60 years and are below the poverty line. The constitution according to Article 41 reminds the Government of India to ensure that it takes care of these people and provides them with a pension which would allow them to sustain and fulfill their day-to-day needs. Thus, people above the age of 60 years also known as senior citizens can avail such schemes for themselves. However, one of the drawbacks of such schemes that the pension provided may not be sufficient for an individual to take care of his/her needs.

        For example, the Indira Gandhi Old Age Pension Scheme is one of the pension schemes which offers a meagre sum of only Rs.200 as a pension to the policyholder. For people who fall in the age bracket of 60 years to 79 years get paid a pension of Rs.300 where Rs.200 is paid by the Central Government and Rs.100 is paid by the State Government. The scheme covers only 3.5 crore elderly people out of the 10.3 crore elderly people in the country.

        People who are above the age of 80 receives a pension amount of Rs.500 only. This tells us that there is a huge need to enhance the pension amount so that the senior citizens are able to not only fulfill their needs but also live a dignified life.

        Atal Pension Yojana (APY) is another pension scheme which aims to provide pension to people belonging to the unorganised sector. The budget allocated under this scheme has been significantly refused from Rs.170 crore in 2017-18 to Rs.155 crore in 2018-19.

        There have been various demands and protests over the years where the pension amount has been asked to be increased. Despite all the protests, the government is yet to take any formidable action and increase the pension amount.

        Along with the pension amount which is meagre in nature and simply not enough for a person to take care of his/her needs, other problems such as linking of Aadhaar card, poor coverage, and improper allocation has only added to the problems. It is time that the government takes steps in order to ensure that the allocation is done in a smooth and proper manner so that the senior citizens in India are able to receive proper pension amount and take care of their daily needs.

        Mistakes to Avoid when Planning for your Retirement

        In order to truly enjoy the golden years of your life without any financial troubles, it is vital to start planning for this stage of your life from a young age. Retirement planning involves assessing your current stage of life, determining your retirement goals, estimating the expenses that you might have to incur during your retirement, and creating and implementing a savings plan that you will need to follow diligently throughout your employment years. There are also certain mistakes that you need to look out for and avoid when planning for your retirement, such as:

        1. Underestimating your retirement needs: In order to have a sufficient sum of money for your retirement years, it is necessary to first determine an accurate retirement corpus. The amount that you will need to save should be reflective of the kind of lifestyle you wish to have in the future. Also, given how steeply the cost of living can increase on an annual basis, you will need to make sure to consider inflation when determining your retirement fund. Further, if you have any dependents, you will also need to take their needs into consideration before deciding on a certain retirement corpus.
        2. Not starting early: Most people put off retirement planning until their 40s or 50s. While it is never too late to start saving for your retirement, it is certainly advisable to start planning for it from a young age when you don’t have too many financial commitments. Also, the earlier you start saving for your retirement, the more likely it is that you will have a significant corpus by the time you retire. Thus, at least a chunk of your monthly salary should go towards your retirement fund.
        3. Borrowing from your retirement fund: During the course of your life, it can be tempting to borrow from your retirement fund, especially when you are in need of emergency liquidity. However, you should avoid doing this at all costs. Your need for funds will only increase as you grow older. Thus, it is vital that you keep your retirement corpus intact so you are able to use it when you need it the most.
        4. Not diversifying your investments: Ideally, if you want to receive the best returns, you should invest in a number of financial instruments, rather than just sticking to one. Thus, your investment portfolio should have a mix of assets including FDs, mutual funds, bonds, real estate, etc. When investing in market-linked financial options, make sure to take your financial goals and appetite for risk into consideration and invest accordingly. In addition, you should also consider purchasing a retirement or annuity plan from a life insurance provider if you would like to receive regular payouts during your retirement years.
        5. Not accounting for medical needs: Hospitalisation and medical needs are a significant area of expense for most people above the age of 60 years. Considering the rise in hospitalisation costs, it is vital that you account for medical needs and decide your retirement corpus accordingly. If you have a spouse or parents that are financially dependent on you, make sure to also account for their medical needs.


        After years of hard work, you should be able to enjoy your retirement without any financial hassles. Thus, make sure to create a retirement plan today and review it regularly. Ideally, as you start to earn more, you should also be saving more. Doing this on a consistent basis will ensure that you have a significant amount of money saved up in time for your retirement.

      Eligibility Criteria for Pension Schemes:

      The eligibility criteria for pension plans comes down to three main aspects, which are given as follows:

      • Entry Age – One could purchase a pension plan after attaining a certain age. Certain insurers offer plans whose minimum entry age is as low as 18 years, while others ask for individuals to be over the age of 30 years in order to purchase them. Similarly, there is an upper limit on the entry age as well, with this being around 70 years in most cases.
      • Vesting age – This is the age at which one starts receiving pension. This could range from a minimum of 40 years onwards, depending on the conditions in place.
      • Premium – The pension one receives depends on the premium they pay. Most insurers have minimum premium requirements for the pension plans.

      Pension Plan Riders:

      It is possible to enhance the protection offered by a pension plan by choosing additional riders. Listed below are some of the popular riders which can be availed in the country.

      • Accidental death/disability rider – This rider provides an additional sum assured in the event of policyholder’s death due to an accident. It also provides financial support if the insured individual becomes disabled while the plan is in force.
      • Critical illness rider – This rider provides protection against critical illnesses. The number of illnesses covered by the rider depend on the company offering it. The insured will receive financial aid if he/she is diagnosed with a terminal illness while the policy is active.
      • Term rider – Opting for this rider ensures that the nominee receives a death benefit after the insured passes away. It essentially transforms a normal pension plan into a life insurance plus pension plan.
      • Waiver of premium rider – Under this rider, future premiums are waived if the insured meets with an event which leads to disability, resulting in loss of income. It is also valid if the insured is diagnosed with an illness post which premium payments are waived.

      What are Participating and Non-Participating Pension Plans?

      A participating pension plan is one in which the insured receives a bonus component in addition to the regular sum assured. This could be in the form of a reversionary bonus, which is at the discretion of the company. It is basically a plan which participates in the profits of the fund in which the money is invested. The insurance company has the discretion to supplement the sum assured with any bonus in these plans.

      A non-participating pension plan is one which does not accrue any reversionary bonus, with all benefits clearly stated to the policyholder. It does not partake in any profits earned by the fund.

      What is Employees Provident Fund and Employees’ Pension Scheme?

      The Directive Principles of State Policy state that the government shall try its best to ensure that citizens of the country have means to meet basic requirements, including those arising out of old age. As such, the Employees’ Provident Fund Organisation was set up to monitor the Provident Fund Scheme and a Pension Scheme, in addition to an insurance scheme.

      The Employees Provident Fund (EPF) and Employees’ Pension Scheme (EPS) are designed to provide financial assistance to individuals during their retired life. They act as a savings tool, whereby employers and employees contribute a certain portion of their monthly income into a pool, with this investment earning interest.

      EPF applies to any organisation which undertakes a task under Section 1 of the Employees’ Provident Fund Act, and employs over 20 people. Both the employer and employee make a contribution equivalent to 12% of the basic DA of an employee’s salary. This contribution is split into two components, with one going to the EPF pool and the other to the EPS.

      Scheme Employee contribution Employer contribution
      EPF 12% 3.67%
      EPS NA 8.33%

      As indicated in the table, both the funds now get a certain deposit each month. The only difference between both of them is the fact that while the EPF account earns an interest which is compounded annually, there is no provision for interest under EPS.

      It is possible to withdraw the money under EPF if one is unemployed for a period of two months or more. One can also appoint a nominee who will receive the funds in the event of death of EPF accountholder.

      What is PM Pension Scheme?

      The Pradhan Mantri Atal Pension Yojana is a scheme designed to offer retirement solutions to individuals belonging to the unorganised sector. With a majority of the Indian population working in unorganised sectors, there was a need for a pension plan for them. Anyone between the age of 18 and 40 years can participate in this scheme, with them receiving a pension once they are 60 years old.

      Individuals who joined the scheme before December 31, 2015 will be eligible for a government co-pay wherein the government will contribute an amount equivalent to half the contribution of the individual, subject to a maximum of Rs.1,000 per year for a period of five years.

      A savings bank account should be opened by the individual looking to contribute towards this pension scheme. One will receive a pension ranging between Rs.1,000 and Rs.5,000 per month after retirement. The scheme provides a provision for a nominee, wherein he/she will receive the pension if the accountholder dies.

      Atal Pension Yojana – Eligibility, Benefits, and Features

      The Atal Pension Yojana (APY) is a pension scheme that is backed by the Government of India. This scheme was launched in order to help individuals save for their post-employment years. This scheme is ideal for individuals working in unorganised sectors and people without a steady flow of income. The scheme was announced as part of the 2015-2016 Union Budget and is currently being administered by the PFRDA (Pension Fund Regulatory and Development Authority), through the NPS architecture.

      The key benefit of this scheme is that individuals can choose to either invest a sum of Rs.210 every month for a period of 42 years or invest Rs.1,454 every month for two decades. This scheme provides a guaranteed monthly pension ranging between Rs.1,000 and Rs.5,000, based on your investment amount. In order to avail the benefits offered by this scheme, individuals will have to open a savings account with a post office or a bank.

      Eligibility Criteria for the Atal Pension Yojana Scheme

      • This scheme can only be availed by Indian citizens.
      • The Atal Pension Yojana (APY) can be availed by individuals between the ages of 18 years and 40 years.
      • The exit age for the APY scheme is 60 years.
      • The minimum contribution period for this scheme is 20 years.
      • Only individuals with an active savings account can join this scheme.
      • Under this scheme, the Aadhaar will be taken as the primary KYC. Thus, it is recommended that you have a mobile number and Aadhaar for added ease. In case your Aadhaar details are not available at the time of subscribing to this scheme, they can be submitted on a later date.

      Key Features and Benefits of the Atal Pension Yojana Scheme

      • The subscriber is eligible to receive a pension of Rs.1,000, Rs.2,000, Rs.3,000, Rs.4,000, or Rs.5,000. Further, the subscriber can also increase or decrease their pension amounts once a year, during the accumulation period.
      • The Government of India will contribute up to 50% of the contribution made by the subscriber of Rs.1,000, based on whichever is the lower amount, for a period of 5 years. Government co-contributions are only available for those individuals who are not taxpayers and are not covered by Statutory Social Security Schemes.
      • In case the subscriber delays the payment, the bank will levy certain nominal default charges.
      • If the subscriber passes away, the pension amount will be paid to the spouse. Upon the death of both spouses, the pension corpus will be made available to the nominee.
      • Subscribers cannot exit this scheme before the age of 60 years. Individuals will only be allowed to exit from this scheme in case of a terminal illness or death of the beneficiary.

      How to apply for the Atal Pension Yojana online?

      In order to apply for the Atal Pension Yojana scheme, you will first need to download the APY subscriber form from the official website of the bank in which you hold your savings account. APY forms are usually available on all bank websites. After downloading the page, you will need to fill it up with the required details and submit it to your bank branch. You will also be required to submit certain additional documents, after which your APY account will be opened.

      National Pension System & its Benefits?

      The National Pension System (NPS) was launched by the government in 2004 with a vision to provide a pension to all retired citizens of the country. Open to employees from both, the government sector and private sector, it invests the money in funds which are managed by the Pension Fund Regulatory and Development Authority (PFRDA).

      One can choose between two account types, namely a Tier-1 account, which is designed to promote savings for retirement and a Tier-2 account. Individuals cannot withdraw any money from a Tier-1 account, ensuring that they have a corpus for retired life.

      A Tier-2 account, on the other hand permits one to withdraw money from it. It is designed to promote voluntary savings.

      The National Pension System offers a range of benefits to those looking for steady pension after retirement. Some of them are highlighted below:

      • One can choose the kind of account they want, with it providing the option of opening either a savings account or a retirement account.
      • Being a government initiative, it is transparent, with members given a daily update on their contribution. It also helps one track the money, giving them the chance to modify/increase contributions to meet any future requirement.
      • The entire process is simple, with each member provided a unique Permanent Retirement Account Number (PRAN). Opening an account is easy, thanks to nodal offices present across the country.
      • The scheme is regulated by the PFRDA, ensuring that the money is not invested in risky ventures.
      • Even if a member were to move a job, he/she can continue using the same PRAN, ensuring that there are no cumbersome procedures to transfer the money from one account to another.
      • It provides tax benefits to individuals. Those with a Tier-1 account are eligible for tax deductions on their contributions under Section 80C of the Income Tax Act. Additionally, any appreciation of the contribution and any money used to purchase annuity is tax free.

      I am a 38-year old engineer who earns Rs.80,000 per month. My wife earns around Rs.55,000 per month. I have a term insurance cover for Rs.1.5 crore and my wife has a term plan for Rs.1 crore. Together, we pay around Rs.30,000 per year for the term insurance. We also have other investments in mutual funds, SIPs, PPFs, etc. We invest around Rs.25 per month in various SIPs. We also have other lump sum mutual fund investments intended for the long term. I am thinking of purchasing a retirement plan for us. How much should I invest every month to get a return of Rs.2 crore at the end of 20 years?

      When you are calculating your retirement corpus, it is better to calculate the amount based on your current income and expenses. You may inflate the expenses by a certain level and determine the amount you may need after your retirement. The amount may vary based on the type of plan chosen and the interest rate offered.

      If you are considering retirement plans, you may opt for plans with or without annuity options. In the case of pension plans, a certain amount will be provided as lump sum payment and the rest will be paid as annuity payments. If you are looking forward to get lump sum payment of Rs.2 crore at the end of 20 years, you may also opt for an endowment or ULIP plan. If you choosing a ULIP, make sure that you factor in the risk while calculating the return amount.

      Considering a conservative rate of return of 8%, you may have to invest at least Rs.33,000 per month to get Rs.2 crore at the end of 20 years. Your actual returns from a specific plan may vary based on various other factors. If you an endowment plan, the risk is extremely minimal and you can get guaranteed returns at the end of the policy term.

      What is the lock in period for Varishta Pension Bima Yojana?

      The lock in period for Varishta Pension Bima Yojana is 15 years. However, you must either consult the concerned authorities associated with this pension plan or seek the help of a financial advisor so that you can be completely sure about your future needs and check whether it will be suitable for you to invest in this plan. Once you are sure about your future goals, you can then go ahead and purchase this particular pension plan for yourself.

      I am a 56-year person employed in a private company as a senior manager. I am planning to retire at the age of 60. I have my own house and enough savings to take care of my needs. At present, I am planning to buy an annuity plan to take care of my monthly expenses after retirement. I am a little worried about the potential fluctuations in interest rates. Will my pension amount reduce because of fluctuations in interest rates? Is there a way to keep the interest rate stable for my annuity plan?

      For annuity plans, the interest rate remains locked for life. This is not similar to a retirement plan where you start building a corpus from a very young age. At this age, you might be opting for an immediate annuity plan. If that is the case, you don’t have to worry about fluctuations in interest rates. When the annuity payments start, there will not be any change in the amount you are getting year after year.

      Rajesh and Sonal Chatterjee (aged 38 and 34 years, respectively) are employed and have a combined salary of Rs.1.5 lakh in their household. They live in their own house which has no outstanding mortgage. They have bought a new house recently and rented it out for Rs.25,000 per month. They have an outstanding mortgage of Rs.15 lakh on this new property. In addition to this, they have an outstanding car loan worth Rs.7 lakh. They pay EMIs worth Rs.45,000 per month for these two loans. They also have a high-value family floater health insurance coverage for Rs.20 lakh.

      In addition to their properties, they have also invested in mutual funds worth Rs.5 lakh and PPF worth Rs.5 lakh. They also have EPF worth Rs.4 lakh each. They have two children aged 8 years and 6 years. The couple has invested in children’s fund worth Rs.10 lakh each for their children. They pay around Rs.50,000 a year for this endowment plan. They both have term insurance worth Rs.1 crore each. Despite all these investments, they still have not decided to invest in a retirement plan. How much investment will be adequate for them considering the fact that they both want to retire by the age of 55 years? How much pension can be expected by investing in these retirement plans?

      The couple has a solid investment so far. However, they do need a retirement plan if they wish to leave a considerable portion of their assets for their children. Jointly, they both have close to 20 years of productive life left in them before they retire. They have taken care of almost all the major expenses except for retirement. Rather than investing in a unit-linked retirement plan, they can opt for low-risk endowment covers to build their retirement corpus.

      The couple has the option of investing either in a single premium pension plan or a yearly premium retirement plan. If they start investing around Rs.25,000 per month for the next 20 years, they can get a pension of up to Rs.10 lakh per year following their retirement age. Considering the fact that they can make this investment after the present expenses, they can build a decent corpus as mentioned above. They may also choose plans that provide a portion of the invested money as lump sum payment and the remaining amount as a yearly annuity. In this way, they can take care of their expenses following their retirement.

      I am a 32-year old man working for a private company. I earn Rs.55,000 per month. I already have a term plan for Rs.1.5 crore. My wife is also working in a private company and she earns Rs.30,000 per month. I have been investing in mutual funds for the last three years. I also have fixed deposits and PPF investments. I am now looking forward to investing in retirement and pension plans. When is the best time for me to invest in these plans? Also, how much money should I invest?

      You may choose to invest in retirement plans at any age you can afford adequate disposable income. Unlike term plans, the cost of coverage in retirement plans may not change a lot with regard to your age. However, if you enter early, you can build a large corpus for your retirement. If you can afford premiums for your retirement plan, you need to start investing right away without any delay.

      The amount you need to invest is largely determined by the maturity amount you wish to have. Most of the retirement plans are endowment policies that offer guaranteed returns to policyholders. Hence, the risk is minimal here. If you have a higher risk appetite, you may also consider investing in market-linked plans and get higher returns. You can check with the insurer directly before deciding on the amount you can invest. Many retirement plans cap the minimum age of entry at 35 years. You can use the EMI calculator in the insurer’s official website to determine the exact corpus you are likely to have.

      You may also have to choose whether you need lump sum payment or annuity. You and wife can also invest in the same pension plan and get joint life coverage. Based on a rough estimate, you need to invest at least Rs.10,000 per month over a period of 20 years if you wish to have around Rs.35 lakh in lump sum along with yearly annuity payments. Explore the different options available in the market before making a final decision.

      Investment in pension funds is becoming quite popular. As I am returning to India for good this year, I want to know how safe and secure these funds are and whether they are properly regulated?

      Pension Fund and Regulatory Development Authority Body (PFRDA) is the body which regulates the Pension Funds in India and exercises control over the pension fund managers (PFMs) in India. PFRDA has made it clear that PFMs are supposed to invest money only in corporate bonds with AA ratings. It is understood that the money will be allowed to invest in AAA ratings as well in the near future. A committee has been set up by PFRDA in order to streamline the investment norms.

      Regulations rare tight ad PFMs are supposed to closely monitor the companies before investing in them. Hence, it is relatively safe to invest your money in these types of funds.

      I am a 33-year digital marketer earning a salary of Rs.65,000 per month. I am planning to invest Rs.10,000 per month to build a retirement corpus for my future. I live in my own home, and I have term and health insurance covers for my protection. Which is the best investment tool for my requirements? Can I get higher returns with mutual funds than pension plans?

      Both mutual funds and pension plans are good investments. Since you can invest Rs.10,000 per month, you can start investing it in a systematic investment plan (SIP) and continue to accumulate earnings till the date of your retirement. You can maintain a diversified portfolio with a combination of debt and equity funds. With a well-planned investment strategy, you can get solid returns at the time of your retirement (say 58 years).

      Many mutual funds allow short-term capital gains in the form of systematic withdrawals. You may also get long-term capital gains at the end of the mutual fund term. One thing you must note here is that both short-term and long-term capital gains are taxed as per the applicable rate under the revised law. In pension plans, the annuity income generated is also taxed as per the applicable rate. However, the tax on capital gains tends to be lower than the tax on annuity income or salary income. Considering this, mutual funds could be beneficial for you in the long run.

      You may consider investing in both options if that is your requirement. For instance, you may invest Rs.5,000 in a pension plan and the remaining Rs.5,000 in mutual funds. At maturity, you can use the proceeds from the mutual fund to buy a pension plan. As your income increases over the period of time, you can increase the investments allocated to various funds and pension plans.

      FAQs on Pension Plans

      1.What is the difference between immediate annuity and deferred annuity pension plans?

      For example, let’s say you subscribe to a pension plan by choosing a deferment period of 10 years. For the next 10 years, you have the pay premiums and build a corpus as per the chosen plan. The amount invested in the fund will continue to earn for the next 10 years. After the completion of this period, the insurer will start paying you annuity as mentioned in the policy schedule. You will get annuity payments based on the value of funds accumulated over these years.

      2.What is the minimum age at entry for pension plans?

      The minimum age at entry for a policy will vary based on the insurer’s terms and conditions. The eligibility criteria of a policy can be found in the policy brochure.In most cases, the policyholder must be over 18 years of age. Some pension plans set the minimum entry age at 30 years. In case of some immediate annuity plans intended for senior citizens, the entry age could be as high as 55 years. Based on the type of plan chosen, the entry age criteria will differ for various pension plans.

      3Do pension plans also offer a life cover against death to the policy buyer?

      Not all pension plans offer a risk cover against death to the policyholder. Thus, make sure to read through the policy brochure carefully and familiarise yourself with the inclusions, exclusions, and policy benefits before purchasing the policy.

      4.If I purchase a pension plan, will I receive annuity payments throughout my life?

      You will receive annuity payments as per the annuity option chosen by you. Most insurers offer a number of annuity payout options to policy buyers. Thus, you can choose a payout option as per your financial needs. There are plans that offer annuity throughout the life of the policyholder. Upon the death of the policyholder, the sum assured amount will be provided to the insured’s nominee or legal heir.

      5.What is the grace period?

      In order to keep your policy in force, you will need to pay the due premiums to your insurance provider as per the premium payment mode that you opted for while buying the policy. However, insurance providers also offer a grace period after the premium payment due date, within which the premium will have to be paid. If the premium is not paid during the grace period, the policy coverage may lapse. The grace period that is usually offered by an insurance company ranges between 15 days and 30 days.

      6.Can policy buyers choose the annuity payout frequency at the time of purchasing a pension plan?

      Most insurers give policy buyers the option to choose the annuity payout frequency. Thus, you can opt to receive payments on an annual, half-yearly, quarterly, or monthly basis.

      7.Are policy buyers required to pay the premium as a lump sum to the insurance provider when purchasing an annuity plan?

      Most insurance providers give policyholders the choice to pay the premium for a limited number of years during the policy term or as a lump sum at the time of purchasing the policy. However, the premium payment mode will vary from plan to plan. Thus, make sure to opt for a pension plan with a premium payment mode that is well-suited to you.

      8.Can insurance riders be purchased along with pension plans?

      Yes, you can choose to purchase any rider that the insurance provider offers along with the base policy.Some of the common riders offered along with pension plans include term assurance rider, critical illness rider, waiver of premium rider, accidental death or disability benefit rider, etc.

      9.When should you purchase a pension plan?

      Pension plans are ideal for individuals looking to secure their post-employment years. Thus, if you wish to receive a fixed source of income during your retirement, you should consider purchasing a pension plan. It is advisable to purchase a pension plan as soon as you can to ensure your retirement years are financially secure.

      10.Can pension plans be surrendered?

      You may be able to surrender a pension plan based on the policy terms and conditions. However, in most cases, insurance companies do give policyholders the option of surrendering their insurance policy if the policy has acquired a surrender value. That being said, it is advisable to keep your policy in force in order to fully enjoy the coverage and payouts that will be offered to you as part of the policy benefits by the insurance provider.

      11.What is vesting age and vesting date?

      The age from which the pension is paid is called the vesting age. The vesting date is the date from which the pension starts. For example, a policy with a vesting age of 60 years will begin paying pension only after the individual turns 60 years old.

      12.What is annuity?

      Annuity is a defined amount of money paid to an individual at regular intervals of time, typically after he/she retires. An annuity plan is a contract between the insurer and the insured, wherein the insured makes payments to the insurer, with the insurer providing regular payouts after a specified period of time.

      13.Is it possible to purchase a pension plan online?

      Yes, most insurance companies provide the option to purchase a pension plan online. There are a few pension plans which can be purchased only online.

      14.Is it possible to increase the payout amount for my pension plan?

      Most pension plans do not provide the option to modify the payout amount after the plan has been purchased. An insurer can, however, make exceptions based on the rapport a customer shares with them. It is advisable to check this with the insurer before purchasing a policy.

      15.I wish to withdraw the amount in my pension fund before I retire. Is this possible?

      Most pension plans do not offer the liquidity to withdraw money before the vesting age. This could vary from plan to plan and one should check this with the insurer before buying it.

      16.Which is better – A government pension scheme or a pension plan by an insurer?

      Both schemes are designed with a specific purpose in mind. One should consider the purpose before choosing one. Government pension schemes are primarily targeted to those who have no other means of income after retirement. These are more affordable but have limitations on the amount one can receive. Pension insurance plans, however, provide one an opportunity to customise a plan based on their requirement.

    News about Annuity/Pension Plans

    • Government clears pension scheme for traders and shopkeepers

      The newly formed government by Prime Minister Narendra Modi in its latest cabinet meeting cleared the new pension scheme for traders and shopkeepers. The new pension scheme promises a pension of Rs.3,000 to all retail traders, shopkeepers, and self-employed people after they attain the age of 60 years.

      This decision taken by Modi is likely to help more than 3 crore shopkeepers and traders in India.

      Due to this decision, another five crore traders are expected to become a member of the pension scheme in times to come.

      All the shopkeepers and traders with a GST turnover of less than Rs.1.5 crore and aged from 18 years and 40 years can become a part of this pension scheme.

      10 June 2019

    • Increase in companies’ and state government contribution towards NPS proposed by PFRDA

      The Central Board of Direct Taxes (CBDT) has been requested by the Pension Fund Regulatory and Development Authority (PFRDA) to increase the National Pension System (NPS) contribution of companies and state governments to 14%. This would be in-line to the Central Government’s contribution. The Central Government’s contribution was increased from 10% to 14% in April 2019.

      Supratim Bandopadhyay, the whole-time member of the PFRDA, said that the move will be a win-win for both parties as it can be accounted as a business expenditure by employers and employees will be eligible for a tax break. He further added that there is a target of 65 lakh to 75 lakh new subscribers to join the scheme in the coming year. The PFRDA has also requested that the tax benefits be increased to 60% of the amount that is available at the time of maturity. Currently, tax benefits are provided to 40% of the corpus that is available at maturity. The new Modi government is expected to announce its first budget on 5 July 2019. Other recommendations that have been made is to increase the upper limit of Atal Pension Yojana (APY) from 40 years to 50 years and increase the monthly slab from Rs.5,000 to Rs.10,000.

      6 June 2019

    • SAIL launches pension scheme for current and former employees

      The government-operated steel manufacturer, Steel Authority of India Ltd. (SAIL), has introduced a new pension scheme which will be applicable to current as well as former employees of the organisation. As per guidelines issued by the Department of Public Enterprises (DPE) and the approval of the scheme by the Ministry of Steel, the scheme will be offered to all eligible employees of SAIL.

      As per a report, executive employees of SAIL who were on rolls of the organisation on or after 1 January 2007 and non-executive employees of SAIL who were on rolls on or after 1 January 2012, will be eligible for the pension scheme. In a statement, it was said that the trust deed for the scheme was signed by selected trustees of the Workers’ Unions, SAIL Management, and Officers’ Associations, making the creation of the SAIL Pension Trust formal. Over 55,000 former employees of SAIL will be covered under the scheme.

      27 May 2019

    • Tripura government plans to continue with pension schemes of former regime

      The BJP government in Tripura has decided to continue with the pension schemes introduced in the state by the former Left Front government. There are about 33 pension schemes currently available in the state, and they benefit over 4 lakh people. It is estimated that about Rs.26.78 crore is being spent every year in this scheme. Among these plans, three are sponsored by the Central Government.

      Santana Chakma, Tripura’s Minister for Social Welfare and Social Education, stated this in response to rumours that the existing pension schemes will be cancelled by the government.

      The previous government has introduced various pension schemes ranging from Rs.600 to Rs.2,500 per month for people belonging to the weaker sections of the society. The minister also noted that state-wide verification of the beneficiaries is being undertaken now and eligible beneficiaries would not be removed from any scheme.

      20 February 2019

    • Govt. introduces new pension scheme for informal workers

      The government has introduced a new scheme called the ‘Pradhan Mantri Shram Yogi Maan-Dhan (PM-SYM) scheme to provide pension benefit to informal workers in the country. Under this scheme, a monthly pension of Rs.3,000 can be availed in the 3.13 lakh Common Service Centres (CSCs) located in different parts of the country. Various informal workers including street vendors, construction workers, agricultural workers, domestic workers, rickshaw pullers, etc. can benefit from this scheme.

      Though this scheme is offered for all informal workers, it is not available for those who are already registered in various schemes like National Pension Scheme (NPS), Employees’ Provident Fund scheme, and Employees’ State Insurance Corp scheme.

      To enroll in this scheme, informal workers can visit the nearest CSC with their Aadhaar and savings bank/Jandhan account passbook to register themselves under this scheme. Monthly contribution for this scheme starts from Rs.55, and it is likely to increase with the age of the individual. The government will also provide matching contribution in the individual’s account.

      20 February 2019

    • Finance Minister announces pension plan for unorganized sector in the interim budget

      Finance Minister, Piyush Goyal, announced the interim budget for FY2019 on Friday in Lok Sabha. While the relief provided to the individual taxpayers is a highlight of the budget, the pension plan introduced for the unorganized sector is expected to aid many families. The mega pension scheme named ‘Pradhan Mantri Shram Yogi Mandhan’ is basically introduced for individuals in the unorganized sector. Therefore, small and medium farmers will benefit from the scheme after 60 years of age. The contribution towards this scheme is Rs.100 p.m. The pension that will be provided after the individual crosses 60 years will be equal to Rs.3,000 per month. A sum total of Rs.500 crore has been allocated for this scheme and more funds will be added if need be. The scheme has been planned to be implemented in the current year.

      4 February 2019

    • Government of India announces hike in tax-free gratuity and assured pension for members from the unorganised sector

      In what was considered the budget for the middle-class population in the country, the Government of India has rolled out a host of benefits through the latest Union Budget. On February 1, 2019, the Government announced that the tax-free gratuity limit will be increased to Rs.30 lakh from the limit of Rs.20 lakh that was set last Union Budget. Just last year, the Government of India doubled the gratuity limit to Rs.20 lakh. This means, the employer and employee will not be taxed if the gratuity payout is less than Rs.30 lakh and this will prove to be a boost for the middle-class population in the country. In addition, the Government of India has assured a pension income for members from unorganised sector of Rs.3,000 per month when the candidate reached the age of retirement. The member will have to make a contribution of Rs.100 per month towards his/her retirement fund and an additional Rs.100 will be contributed by the Government on their behalf. According to Financial Minister Piyush Goyal, the scheme will benefit 10 crore workers and becomes the largest pension scheme in the world.

      4 February 2019

    • Govt. plans new gratuity calculation to provide relief to private sector workers

      The reigning NDA government is reportedly working on a new gratuity calculation plan to provide relief to individuals employed in the private sector. According to certain sources, the government is planning to reduce the gratuity eligibility time from five years to three years. It is reported that the Ministry of Labour has asked for feedback on this subject from various industry bodies in the country.

      Labour Unions in the country have already been demanding a reduction in gratuity time limit. The government is also reportedly planning to extend gratuity benefits to contractual employees working for the central government. Once approved, this decision is likely to benefit millions of employees working in the government and private sector.

      Gratuity is a mandatory benefit offered by employers to reward the loyalty of their employees. As per the Payment of Gratuity Act of 1972, employees must be provided a monetary reward in exchange for their long-service in an organisation.

      16 November 2018

    • UP Govt: Pension scheme for specially abled people has now become completely online

      The pension scheme offered by the Uttar Pradesh government for the specially abled people has become completely online according to an official from the state. The government has also instructed state officials that specially abled people are not harassed in the name of physical verification.

      In November, the government has identified more than 47,000 people eligible for the pension scheme. Officials are instructed to make the first installment of the payment by next week for these beneficiaries. District officials in the state received all the instructions from Additional Chief Secretary of Handicap Welfare Mahesh Gupta.

      The scheme benefit has been increased to Rs.500 per month from Rs.300 per month. The budget for 2018 has been increased to Rs.575 crore from Rs.333 crore. This scheme is available for those who have more than 40% disability. The state government made this announcement after receiving complaints from beneficiaries that they have a tough time providing disability certificate.

      15 November 2018

    • NRI groups to invest in Kerala regular saving schemes

      Around thousand people have joined Kerala’s Pravasi Chitty scheme since it opened for registration on October 25. A total of Rs.12 million has been invested till now.

      Kerala, in order to fund its infrastructure projects, has started the Pravasi Chitty scheme.

      Kerala with the help of this scheme aims to sign up to one million subscribers in the next few years and also raise up to Rs.100 billion over the next five years.

      The scheme is launched by Kerala State Financial Enterprises (KSFE), which is a non-banking company and is also owned by the Government of Kerala and is designed only for non-resident Indians (NRIs).

      14 November 2018

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