Starting or restarting a hobby, planning a vacation, setting up a new business, moving into a new house with your spouse (probably a farmhouse!) or simply spending quality time with your friends and family - retirement means different things to different people.
However, one thing that is common for all retirees is ensuring financial stability and independence post retirement, which can be ensured by investing in a good retirement plan that pays a regular pension after retirement.
In this article, we will look at three popular pension plans in India - National Pension Scheme (NPS), Annuity Pension Plans and Monthly Income Plans with Life Cover. We will understand their working and how you can check your accumulated old-age pension under each scheme.
National Pension Scheme (NPS)
What is it and how does it work?
NPS is an old-age pension scheme offered by the Government of India. As a subscriber, you invest a regular sum into the plan. The money is then pooled into a pension fund and invested into various portfolios, such as equity shares, government bonds, bills, corporate debentures and so on, based on the choice and risk profile of the subscriber. All the pooling, investing and maintaining the records for NPS is the responsibility of the PFRDA (Pension Fund Regulatory and Development Authority).
There are two choices available to determine where and how your money is invested with this senior citizen pension scheme:
Active Choice - Under this, you choose where your money is invested - Asset E (majority money in equity markets), Asset C (everything except government securities), Asset G (primarily government securities) and Asset A (Alternative Investment Schemes like REITS, MBS, CMBS, etc.). The combination of the asset groups for your investment is completely your choice subject to certain limits. You can put 100% of your money in Asset C and G, up to 50% in Asset E and up to 5% in Asset A.
Auto Choice (Lifecycle Fund) - Here, the money is invested across three asset classes based on a pre-defined portfolio. The investment in Asset E goes down and that in Asset C and G goes up as the subscriber moves closer to their retirement age. There are three pre-defined portfolios available - Aggressive Life Cycle Fund (75% in equity till age 35 then decrease), Moderate (59% in equity till age 35 then decrease) and Conservative (25% in equity till age 35 then decrease
Who can apply for NPS?
NPS was initially introduced as an old-age pension plan on January 1st 2004 only for government employees. From May 1st 2009, all citizens of India between the ages of 18 to 65 years of age can subscribe to NPS.
How to check retirement pension balance from NPS?
When subscribing to the scheme, you can choose to receive monthly statements on your email ID to help you stay updated with your old-age pension balance.
If you wish to check your NPS corpus and current valuation, follow the below steps:
Go to the CRA-NSDL portal for NPS subscribers.
Under the ‘Subscribers’ tab, enter your PRAN as a user ID and account password. There will be a Captcha code on the screen. Enter it to log in.
Note: Your PRAN and login details are provided to you in the PRAN Kit when you subscribe to NPS.
Find the “Transaction Statement” section. Under that, click on the “Holding Statement” option.
The screen will display details of your accumulated NPS balance.
To get an NPS balance statement with the details of your contributions and other transactions, click on the “Transaction Statement” option under the mentioned section.
NPS also offers a mobile app for both Android and Apple phones. You can download the same and check all details, including the NPS accumulated corpus from the convenience of your mobile phone.
Annuity Pension Plans
What is it and how does it work?
Annuity plans also offer a regular income stream after retirement. You ‘purchase an annuity’ from the provider by paying a ‘purchase price’. The purchase price can be a lump sum for Immediate Annuity Plans or a regular payment for Deferred Annuity Plans.
The money you pay or the purchase price is is determined by the life insurance company in annuity funds comprising equity stocks, government bonds and other securities. The returns generated are paid out to you as annuities/ retirement pension.Annuity plans also offer a regular income stream after retirement. You ‘purchase an annuity’ from the provider by paying a ‘purchase price’. The purchase price can be a lump sum for Immediate Annuity Plans or a regular payment for Deferred Annuity Plans.
The money you pay or the purchase price is is determined by the life insurance company in annuity funds comprising equity stocks, government bonds and other securities. The returns generated are paid out to you as annuities/ retirement pension.
Ideal for individuals nearing retirement, immediate annuity plans pay out the annuities/pension immediately after the payment of the purchase price. Perfect for long-term retirement planning, deferred annuity plans allow you to start investing early and build up a corpus until retirement when the annuities are paid out.
Some annuity plans also have a life cover component, wherein the appointed nominee gets a predefined sum assured upon the policyholder’s death.
Who can apply for annuity plans?
Every life insurance company has its own set of eligibility criteria for annuity plans. Generally, the entry age is between 30 years of age (minimum) and 85 years of age (maximum). Thus, Indian citizens between the ages of 30 to 85 years, as per individual insurer policies, can buy an annuity plan.
Monthly Income Plans With Life Cover
What is it and how does it work?
Monthly income plans are life insurance savings plans that offer a guaranteed1 monthly income upon maturity. Perfect for retirement planning, they not only assure a monthly retirement pension but also protect your family against any eventualities.
For the entire tenure of the policy, you get a life cover. In case of any eventualities, your family will receive a predetermined death benefit. You can match the tenure of the policy with your retirement age so that the maturity payouts begin as soon as you retire.
The income tenure varies from insurer to insurer. For instance, at Tata AIA Life, we offer monthly income for up to 288 months. Additionally, the income is paid at 8.35% to 13.03% per annum of the total premiums paid. Also, just like a life insurance plan, you can further boost a monthly income plan’s coverage with the help of riders#.
Tata AIA Life monthly income plans also allow you to avail of a loan against the policy to fulfil any immediate/emergency financial requirements.
Who can buy a monthly income plan?
Life insurance companies lay down specific and detailed eligibility criteria to buy a monthly income plan. For instance, any Indian citizen between the ages of 6 to 60 years can buy a monthly income plan, subject to laid out conditions.
How to check the old age pension balance with life insurance companies?
You can opt to receive monthly updates of your retirement plan (annuity plan/monthly income plan) contribution, including the accumulated corpus, current annuity rate, premium paid details and payout details on your email ID.
To check the accumulated balance for annuity/monthly income plans, simply log into your account on your insurer’s website. You can access detailed transaction statements, annuity rates, premium payment details, accumulated corpus, payout details and much more on the website.
If your insurer has a mobile app, you can download the same and check your retirement plan contribution details easily on your phone.
How to Download Policy Statements with Tata AIA Life Insurance?
If you bought a retirement plan with life cover from Tata AIA, you can get a detailed account statement from our website:
Go to the Customer Service Tab.
Click on Download Statements.
You can download the statement of your choice by simply providing your mobile number/email address/policy number and the date of birth of the life assured.
Tata AIA Life also offers mobile applications for both Android and iPhone users, wherein you can find details of your policy.
Additionally, you can contact us 24x7 and get the necessary details of your Tata AIA Life retirement plan.
The golden years, the second innings of life - the post-retirement phase is known in many ways. It is a time when after years of hustle and hard work you finally have time to pursue your passions. An efficient old-age pension scheme allows you to fulfil all your dreams and passions after retirement.
If you are looking for a regular old-age pension, apply online on the official portal of your choice of provider. Digitisation has made it possible for retirees to not only buy but also check their old-age pensions online from the comfort of their homes. Simply log in to the respective websites and check your accumulated pension.