Page 49 - The Insurance Times October 2024

employed Persons (NPS) - It is a voluntary and all citizens of India between 18 - 60 years which
contributory scheme meant for the shopkeepers or includes residents, non-residents of the country and the
owners of petty or small shops, restaurants, hotels, real unorganized sector workers on voluntary basis. The age
estate brokers etc. with an annual turnover of less than bracket has been increased upto 70 years now. Thus
Rs. 1.5 Crore and who are not covered in EPFO/ESIC/ investment in NPS can be made by the following sectors:
PM- SYM .It is available for the age group of 18-40 Central/State Govt. Employees
years.. The beneficiaries are entitled to receive monthly
Corporates
assured pension of Rs.3000/- after attaining the age of
All Citizen Model (Individual)
60 years.
Unorganized Sector Workers
The monthly contribution ranges from Rs.55 to Rs.200
depending upon the entry age of the beneficiary. Under The investor has the choice of actively deciding the
this schemes, 50% monthly contribution is payable by investment with various fund managers in different
the beneficiary and equal matching contribution is paid asset class or can choose a auto mode of investment.
by the Central Government. 10. Trustee administered Pension Schemes by employers
8. The Atal Pension Yojana (APY) - Started in June 2015 , for employees - Similar to the Government schemes ,
this is a contributory pension scheme for the many big employers both in public and private sector
unorganised sector . Any bank account holder between have developed pension schemes. These scheme were
the age group of 18 and 40 who is not a member of on defined benefit basis till recent past but now the
any statutory social security scheme can avail the employers too have shifted to defined contribution type
benefit under this scheme. An individual is required to of pension. These schemes are trustee administered
contribute for at least 20 years before reaping the schemes, where the employer manages the scheme
benefits of the scheme. This scheme has replaced the through trustees and purchase pension from insurance
Swavalamban scheme of National pension scheme. company at the time of payment.
The scheme provides pension benefit to those who work 11. Pension schemes offered by Insurance Companies
in the private sector or are employed in such on Group and Individual basis - Public and private
occupations where they do not get any pension benefit. sector life insurance companies offer immediate and
They can opt for a fixed pension of INR 1,000 or 2,000 deferred annuity plans on individual basis. Some of
or 3,000 or 4,000 or 5,000 on attaining the age of 60. these annuity products are unit linked and the returns
The contribution depends on the amount of pension in such products are not fixed and depend on the equity
opted and the age of the member at the time of entry market. Besides this they also offer group
into the scheme. Upon the contributor's death, the superannuation plans with cash accumulation system
spouse of the contributor gets the pension and after the with guaranteed minimum return on the
spouse's death the corpus accrued is returned back to superannuation funds to the employers on group basis.
the nominee. The investment of the amount collected Annuity and pension plans vary in terms of their benefits
under the scheme is managed by the Pension Fund and structure. These plans are of following types:
managers as per the investment pattern specified by Deferred Annuity: A deferred pension plan is the one
the Government. Individual applicants are no given the in which contributions are made either through regular
choice of choosing the pension funds or the investment premiums over a policy term or a single premium option
pattern as in National pension scheme. is also there and the fund accumulates for a
predetermined term. After the policy term is over,
9. National Pension Scheme - The National Pension
System (NPS) launched by Government of India on 1st pension/ annuity begins. The premium paid for deferred
pension plans qualify for tax relief.
January, 2004 provides an option of contributing for
retirement income to all the citizens of India. It is a Immediate Annuity: In an immediate annuity plan,
defined contributory scheme where the returns are pension/ annuity installments commence immediately
subjected market risk . Initially it was introduced for the after purchasing the plan. One has to deposit a single
new government recruits in 2004 (except armed forces) lump sum amount and pension/annuity starts instantly
but with effect from 1st May, 2009 it was opened for but the amount varies with the amount invested and

44 October 2024 The Insurance Times