Making the best of retirement plans

50-65 45-65 50-70 Commutation

33.33%

25%

33.33%

25%

BonusGuaranteed Rs 50 per Rs 1000 for each 
completed year for first 5 yearsBonus of 7%
from 5th policy year and terminal bonus of 40%

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 UNIT-LINKED PENSION PLANS (ULPP)
Besides these traditional pension plans, some insurance companies have launched ULPP. The concept is same as that of ULIP. Here also equity exposure varies from scheme to scheme and company to company.  Maximum equity exposure in case of growth schemes can go up to 100 per cent. Further, you can switch from one scheme to other scheme, that is, from equity to bond or growth to balance. Few switches are allowed free of cost, beyond which the investor has to pay charge.  The ULPPs are open ended. You can enter anytime in these plans at the prevailing net asset value. In such plans, life coverage is optional and not compulsory.  Some plans had delivered good returns of around 30 per cent in a year. In these plans the basic concept is same as that of the traditional pension schemes, like age limit, vesting age among others.  In case of such plans, returns are market-linked and are suitable for risk-takers, who want to take equity exposure. Even risk-averse individual can opt for bond scheme under such plans. Contribution to such plans is also eligible for deduction u/s 80 CCC.  

TABLE II	NAV	1 YEAR RETURNS
Aviva Pension Plus Growth	27.28	22.30%
Hdfc Standard Life Growth	55.09	31.50%
Icici Super Pension Maximiser ii	47.29	35.20%
Kotak Pension Plus Balance	22.4	23.30%

 MUTUAL FUNDS
Mutual funds too have launched retirement benefit pension plans. UTI had launched UTI retirement benefit pension plan in 1994 and Franklin Templeton had launched Templeton India pension plan in 1997.  These are open ended schemes and also invest a certain portion in equities. The maximum exposure to equity in both the plans is 40 per cent. Remember in such schemes investor has to pay entry load and exit load.  In case of UTI retirement benefit pension plan, there is an entry load of 1.5 per cent. There is an exit load of 5 per cent if the exit before a year, 3 per cent after one year but before three years, and exit load of 1 per cent after 3 years.  UTI retirement benefit pension plan had previously managed to deliver returns of around 15 per cent, but now it is finding difficult to deliver even 7 per cent returns. It had paid dividend of around 11.5 per cent every year till 2000. After 2004, it has not paid any dividend.  In case of Templeton India pension plan, there is an entry load of 1 per cent and exit load of 3 per cent if redeemed before three years.  There is a lock-in period of three years and premature withdrawal after three years for a nominal charge. But if units are redeemed after the age of 58, there is no exit load.  Templeton India