1. finance
2. personal finance
3. financial planning
4. retirement and pension

UTI Infrastructure Technology
And Services Limited
Presented By
UTI Infrastructure Technology And Services Limited
(a Government of India Company)
ISO 9001: 2000 / 27001:2005 / 20000:2005 Certified
Plot No. 3, Sector 11, CBD Belapur
Navi Mumbai – 400614
Year 2012
Year 2042
WHAT IS PENSION ?
Pension is a form of Social Security/
Insurance in the form of Monthly
payments paid to the citizens on
attaining the age of superannuation /
retirement to take care of day to day
living expenses.
WHY PENSION ?
 Fall of Joint Family System
 Increase in Life Expectancy
 Improvement in Standard of Living,
Hygiene and Medical Facilities
 Increase in Diseases
 Increase in Cost of Living Expenses
 Changing Life Styles
 Sustainable Income for 2 to 2 ½
decades
Expectancy of Life After Retirement
 Life expectancy has increased from
60 years to 80 years at present
 Live joyfully today as if your going to
die today evening
 Plan for your future as if you are
going to live for at least 100 years
from now.
Advantages of Early
Financial / Retirement Planning
 Larger time horizon.
 Develop Savings habit
 You budget your current expenditures
 Try to enhance your income Levels
 Time & energy for Extra Working
 Exploring new opportunities for investments
 You have the risk taking capacity
 IDEAL AGE FOR START OF RETIREMENT
PLANNING IS 25-28 YEARS
The early you Start Investing, the
Better it is!
 X starts Investing at the age of 28 yrs
 He Invests `1000 every month till the
age of 58 yrs
 Total Investment: `3.60 Lacs
Y starts Investing at the age of 38 yrs
 He Invests `1500 every month till the
age of 58 yrs
 Total Investment: `3.60 Lacs
Early Investment, Always Pays
20.79
10.86
X
Y
@10% assumed rate of growth
Assuming a growth of 10% CAGR in both the cases, X’s
investment would appreciate to `20.79 Lacs and Y’s
Investment would appreciate to `10.86. That means X’s
investment would appreciate to almost double that of Y’s
Life Stages
EARNING &
EXPENSES
Projection of
Earnings & Expenses
Education
1-20
Just
Employed
20-25
Marriage
and house
hold expenses
25-34
AGE
Children
and
education
34-55
Planning for Retired
Retirement
Life
55-60
60 & Above
INCOME REQUIREMENTS ON
RETIREMENT
Current Per Person Per Meal requires
:
` 50.00
3 Meals a Day requires
:
` 50.00 x 3 =
` 150.00
For 2 Persons requirement is
:
Current Income Requirement for Per annum (for Food)
Additional Household Requirements / Annum (Rentals,
` 300.00 Per day
` 109,500.00
:
` 60000.00
Medical Expenses for a Retired Couple / Annum
:
` 25000.00
Miscellaneous Expenses / Annum
:
` 5000.00
Electricity, Telephone / Mobile, Gas / Fuel, conveyance)
etc.
Total :
` 2,00,000.00
Requirements for 2 Member family
:
` 2.00
Requirement Per Annum at the end of 20 Years
:
` 13.45 Lakhs P.A.
:
` 3.36
Lakhs P.A.
(10% inflation)
Requirement for 25 Years
Crores
NEW PENSION SYSTEM
A VIDEO FILM
WHY
NATIONAL PENSION SYSTEM(NPS)?
 Voluntary
 It is prudentially regulated by
Government,







Simple and Easy to understand
Low Cost
Allotment of Unique PRAN Number
Ensures Complete Portability
Flexibility
Transparency
Simple and Web enabled/Online
NPS – An Open ended Investment
Scheme with following features:
Two types of accounts are
available under the scheme:
 Tier I Account - A Non-Withdrawable
account (Creating a retirement Corpus)
 Tier II Account - A voluntary savings
Account - Providing liquidity to park your
short term spare funds.
Investment Choice
Active Choice – Individual
choice (Asset Class E, C & G).
Auto Choice – Lifecycle Fund.
ACTIVE CHOICE



Equity (not more than 50% of total
Investment)
Corporate Bonds (No Limit)
Government Bonds (No Limit)
TABLE FOR AUTOCHOICE (LIFECYCLE FUND)
Age
Asset Class E
Asset Class C
Asset Class G
Up to 35 yrs
50%
30%
20%
36 yrs
48%
29%
23%
37 yrs
46%
28%
26%
38 yrs
44%
27%
29%
39 yrs
42%
26%
32%
40 yrs
40%
25%
35%
41 yrs
38%
24%
38%
42 yrs
36%
23%
41%
43 yrs
34%
22%
44%
And so on……
Key Benefit of NPS
For Middle And Lower Middle Class
(Can be done by people in the
Unorganized Sector)
 NPS offers you a grant of `1,000/- per
annum for investors investing less
than `12000/- per annum (for the
subscribers who do not come under
the fold of any of the Provident Fund
Schemes of India), subject to Net
minimum contribution of `6000/- in
the current Financial Year.
ROLE OF POINT OF PRESENCE
(POP – UTIITSL)
 Provide Services for Application Collection from
Subscribers, KYC Documentation and
Registration Formalities
 Contribution Collection and Uploading
 Withdrawals
 Other Subscriber Services
 Issue of PAN Card (Charges applicable)
 Grievance Resolution
OTHER SERVICES
Change of Particulars
Change of Nominee
Change of Composition of Asset Class
Change of Auto-Active Choice Option
Change of Pension Fund Managers
Withdrawals
Statement of Transactions
Role of
Central Record keeping Agency (CRA)
•
•
•
•
Recordkeeping and Administration
Issue of PRAN Number
Maintenance of Databases
Coordination between various
Intermediaries
PENSION FUNDS MANAGERS
 Government Sector: (All Three) (This model can be opted only
by Corporates and not by Individual Subscribers)
LIC Pension Fund Limited
SBI Pension Funds Limited
UTI Retirement Solutions Limited
 Any one Pension Funds Managers under the Unorganized
Sector are :
ICICI Prudential Pension Funds Management Company Limited
IDFC Pension Fund Management Company Limited
Kotak Mahindra Pension Fund Limited
Reliance Capital Pension Fund Limited
SBI Pension Funds Limited
UTI Retirement Solutions Limited
ANNUITY SERVICE PROVIDERS
 On attaining Normal Retirement Age (NRA) of 60
years – compulsory annuitizing of at least 40% of
your pension wealth and the remaining 60% can be
withdrawn as a lump sum or in a phased manner.
 Minimum 10% of the pension wealth should be
withdrawn every year. Any amount lying to the credit
at the age 70 should be compulsorily withdrawn in
lumpsum.
ANNUITY SERVICE PROVIDERS







Life Insurance Corporation of India
SBI Life Insurance Co. Ltd.
ICICI Prudential Life Insurance Co. Ltd.
Bajaj Allianz Life Insurance Co. Ltd.
Star Union Dai-Ichi Life Insurance Co. Ltd.
Reliance Life Insurance Co. Ltd.
HDFC Standard Life Insurance Co. Ltd.
Pension benefits shall be given by
the Annuity Service Providers
 Annuity Service Providers (ASPs)
appointed by PFRDA shall provide
Pension in the form of Annuities to
the individual subscribers from the
age of 60 years till death.
 On death, the balance corpus will go
to the Nominee.
06 Types of Annunities under NPS






(a) Pension (Annuity) payable for life at a uniform rate to the
annuitant only.
(b) Pension (Annuity) payable for 5,10,15 or 20 years certain and
thereafter as long as you are alive. In this type of Annuity, every
higher option of number of years of Pension chosen, will give
you lesser amount of proportionate Pension.
(c) Pension (Annuity) for life with return of purchase price on
death of the annuitant (Policyholder).
(d) Pension (Annuity) payable for life increasing at a simple rate of
3% p.a.
(e) Pension (Annuity) for life with a provision of 50% of the
annuity payable to spouse during his/her lifetime on death of the
annuitant. (Ardhangi)
(f) Pension (Annuity) for life with a provision of 100% of the
annuity payable to spouse during his/her life time on death of the
annuitant. ((In this option (f) The amount of pension available to
the
Subscriber during lifetime will be less than that available
under option e)).
OTHER INTERMEDIARIES
 NPS Trust (overall Controlling Body)
 NPS Trustee Bank (Intermediary for
Fund collection from POPs and
depositing in the PFMs and
withdrawals)
 Custodian
BENEFITS TO SUBSCRIBER
 Cheapest investment product with better growth
options through long term market-linked saving
 Choice of various funds
 Individual Retirement Account is portable
 Platform to monitor and manage investment to meet
subscriber's diverse financial goals
 Employees contribution is eligible for tax exemption
as per the Income Tax Act, 1961 as amended from
time to time (Only in Tier I Account)
SERVICES TO SUBSCRIBERS
Offers Tier II account which is a voluntary savings facility
with anytime liquidity/withdrawal option
Grievance management through CRA Website, Call
Center, Email or Postal Mail
Routine/quarterly disclosure of the funds
Auto Choice option
Release of daily NAV by PFMs
An option to remain invested even after your retirement.
ELIGIBILITY NORMS
A citizen of India, whether resident or non-resident can
join NPS subject to the following conditions :
 Subscriber should be between 18-60 years of age
as on the date of submission of his / her
application.
 Subscriber should comply with the prescribed Know
Your Customer (KYC) norms as detailed in the
Subscriber Registration Form (CS-1 and CS-2).
OPERATIONAL FEATURES OF NPS
Particulars
Tier I
Tier II
Mandatory
Optional
Rs.500
Rs.1000
Rs.500
Rs.250
Minimum account balance at the end of Financial
Year
As
applicable
Rs.2000
Minimum amount of contribution per
annum
Rs.6000
1000
One
One
Option of Selection of Account
Initial contribution
account opening
at
the
time
of
Minimum amount per contribution
Minimum
Number
Contributions/Annum
of
Frequency on Number of Installments
and Cap on the Amount to be Invested
Unlimited
Installments and No
cap on amount
Scheme Operational Charges

A low cost option for planning retirement and giving maximum
returns to subscribers.
Inter Charge Head
medi
ary
CRA
POP
Service
Charges
PRAN Opening Charges
Rs. 50
Annual PRAN Maintenance
Cost per account
Rs.225
Charge per transaction
Rs.
Initial subscriber registration
and contribution upload
Rs.100
Any subsequent transaction2
6
0.25% of the
Contribution Amount
subject to a Minimum
of Rs.20/- per
contribution
Method of
Deduction
Through
cancellation of
units
To be collected
upfront
Contd…
Intermediary
Trustee Bank
Charge Head
Per transaction
emanating from a
RBI location
Service
Charges
Method of
Deduction
Zero
Through NAV
deduction
Per transaction
emanating from a
Non-RBI location4
Rs.15
Custodian
Asset servicing
charges
0.0075% p.a. for
electronic segment
& 0.05% p.a. for
physical segment
Through NAV
deduction
PFM charges
Investment
Management fee3
0.25% p.a. wef
01/11/2012
Through NAV
deduction
Why NPS Through UTI ITSL
 UTI ITSL is a Government of India Co.
 UTI ITSL has 69 Branches across the
Country
 UTI ITSL has more than 300 AMFI
qualified Staff giving Personalized
Service across the country
 All information about the NAV, MF
Schemes can be easily available.
 PAN Card Service can be made
available(Charges applicable)
 High quality of Service Orientation
NPS – How is it Beneficial for
Corporate
NPS can be run simultaneously with
Superannuation, PF, Gratuity etc.
Corporate acts only as a Support
System for extending the Retirement
benefit to its employees, without any
short/long term liability
NPS – How is it Beneficial for
Corporate
CORPORATE CAN CHOOSE
 Extend this Benefit to a Select Group
of Employees within the Company
 Fix the Contribution amount as a
Percentage of Basic Pay
 Fix the Frequency of Contributions
 Choose the Government Model or the
All Citizen’s Model
BENEFITS TO CORPORATES
 Platform to co-contribute for employees’
pension
 Corporate may select choice of PFM for its
employees or leave the option to
employees for selecting PFMs for
themselves.
 Can claim tax benefits for the amount
contributed towards pension of employees
from 1st Apr, 2012 upto 10% of the salary
(basic and dearness Allowance)Tax
Deductible allowance of employers
Contribution
EXAMPLE 1
Without
NPS
Contribution
With NPS
Contribution
EXAMPLE 2
Without
NPS
Contribution
With NPS
Contribution
EXAMPLE 3
Without
NPS
Contribution
With NPS
Contribution
Annual Salary
Annual Salary
Annual Salary
10% Tax Bracket
20% Tax Bracket
30% Tax Bracket
Basic Pay
350000
350000
600000
600000
1000000
1000000
HRA(50%)
175000
175000
300000
300000
500000
500000
Professional Allowance
80000
45000
140000
80000
250000
150000
Contribution to PF (12%)
42000
42000
72000
72000
120000
120000
Contribution to Gratuity(4.81%)
16835
16835
28860
28860
48100
48100
0
35000
0
60000
0
100000
663835
663835
1140860
1140860
1918100
1918100
100000
100000
100000
100000
100000
100000
15000
15000
15000
15000
15000
15000
0
35000
0
60000
0
100000
Total
115000
115000
115000
115000
115000
115000
Total Income
605000
570000
1040000
980000
1750000
1650000
Taxable Income
490000
455000
925000
865000
1635000
1535000
29000
25500
115000
103000
320500
290500
Contribution to NPS
Gross Salary
Deductions
Section 80 C (includes
Employee Contribution to
Mediclaim
Section 80CCD(2)
Tax Liability
Tax Savings
3500
12000
30000
Pension Fund
Presented By
UTI Infrastructure Technology And Services Ltd.
(a Government of India Company)
ISO 9001 : 2000 / 27001:2005 / 20000:2005 Certified
Plot No. 3, Sector 11, CBD Belapur
New Mumbai - 400614