SUBMITTED BY: VINAYAK GUPTA

B.COM(HONS)

DIFFRENT TYPE OF PENSION SCHEMES,

EMPLOYEES DEPOSIT LINKED INSURANCE

SCHEME &

PUBLIC PROVIDENT FUND

A pension plan is a retirement plan that requires an employer to make contributions into a pool of funds set aside for a worker's future benefit. The pool of funds is invested on the employee's behalf, and the earnings on the investments generate income to the worker upon retirement.

WHAT IS PENSION?

IMPORTANCE OF PENSION PLAN

PFRDA was established by Government of India on 23rd August, 2003.

It acts as a regulator for the pension sector.

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY

National pension system

Atal pension scheme

UP samajhwadi

pension scheme

Indira Gandhi National Old Age Pension

Scheme

NATIONAL PENSION SYSTEM

The National Pension System (NPS) is a voluntary defined contribution pension system created by an Act of Parliament of India.

Administered and regulated by Pension Fund Regulatory and Development Authority (PFRDA)

The National Pension System (NPS) was notified by the Government of India on 22 December 2003,with effect from the 1st January 2004

The scheme was initially designed for government employees only, it was opened up for all citizens of India in 2009

WHO CAN JOIN NPS ?

A citizen of India, whether resident or non-resident can join NPS, subject to the following conditions:• The subscriber should have age between 18 – 60

years as on the date of submission of his/her application to the Point of Presence / Point of Presence–Service Provider -Authorized branches of POP.

• The subscribers should comply with the Know Your Customer norms as detailed in the Subscriber Registration Form.

Un-discharged insolvent and individuals of unsound mind cannot join NPS

Under the NPS, an individual's savings is pooled in a pension fund.

These funds are invested by Pension Fund Regulatory and Development Authority (PFRDA) in the diversified portfolios comprising of government bonds, bills, corporate debentures and shares.

These contributions would grow and accumulate over the years, depending on the returns earned on the investment made.

At the time of a normal exit from NPS, the subscribers may use the accumulated pension wealth under the scheme either to purchase a life annuity from a PFRDA empanelled life insurance company or withdraw a part of the accumulated pension wealth as lump-sum, if they choose to do so.

HOW NPS WORKS?

As per the amendment made by Union Budget 2015 in tax provisions for FY 2015-16, if any customer contributes voluntarily towards the NPS scheme, then he would get an additional benefit of ₹ 50,000 under section 80CD (1B) which would be over and above the ceiling limit of ₹ 1,50,000 as prescribed under section 80 CE.

TAX BENEFIT

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RETURNS ON NPS DURING 2012-13

ATAL PENSION SCHEME

INTRODUCTION

The Government of India has announced a new scheme called Atal Pension Yojana (APY). APY is a guaranteed pension scheme and is administered by the Pension Fund Regulatory and Development Authority (PFRDA). ICICI Bank is registered with PFRDA to provide APY related services.

Features

Guaranteed monthly pension for subscribers, ranging from Rs. 1,000 to Rs. 5,000 per month.Government of India will also co-contribute 50% of the subscriber’s contribution or Rs. 1,000 per annum, whichever is lower. The Government co-contribution is available for those who are not covered by any Statutory Social Security Schemes and is not an Income Tax payer

GoI will co-contribute to each eligible subscriber, for a period of 5 years who joins the scheme in the period June 1 to December 31, 2015. The benefit of five years of Government co-contribution under APY would not exceed 5 years for all subscribers including migrated Swavalamban beneficiaries.

One of the greatest benefits of the scheme may be enjoyed by the poorer sections of society. The government of India has decided to contribute 50 per cent of the user’s contribution or INR 1,000 a year (whichever is lower) for a period of five years. This contribution will, however, be enjoyed only by those who are not income tax payers and those who join the scheme before 31 December 2015.

BENEFITS OF ATAL PENSION YOJANA

The Atal Pension Yojana (APY) is open to all Indians between the age of 18 and 40. This allows an individual to contribute for at least 20 years before reaping the benefits of the scheme. Any bank account holder who is not a member of any statutory social security scheme can avail of the scheme .

All existing members of the government’s ‘Swavalamban Yojana NPS Lite’ will automatically be migrated to the Atal Pension Yojana. It will now replace the Swavalamban scheme, which did not gain much popularity across the country.

WHO IS ELIGIBLE?

Under ordinary circumstances, an account holder who has enrolled for the Atal Pension Yojana will not be able to exit the scheme before the age of 60. Exiting the scheme is only possible in special circumstance such as in the event of the death of the beneficiary.

EXITING THE SCHEME

Government will extend the benefit of the APY via Post Offices all over the country.

In March 2016, the government amended the scheme’s provisions to give the subscriber’s spouse an option to continue contributing to the account for the balance period on premature death of the subscriber.

The Government released Rs 100 crore towards its co-contribution for Atal Pension Yojana (APY) in 2015-16 fiscal.

Also, as per the circular released by the Income Tax department, contributions to the Atal Pension Yojana (APY) are now eligible for the same tax benefits as the National Pension System (NPS). The tax benefits include an additional deduction of Rs 50,000 under section 80CCD(1) introduced in year 2015 Budget.

RECENT DEVELOPMENTS

UP SAMAJHWADI PENSION YOJNA

INTRODUCTION

Samajwadi Pension Yojana is one of the pension schemes launched by the Government of Uttar Pradesh . The scheme is also known as Uttar Pradesh Samajwadi Pension Yojana which was launched on 28th February, 2014. The new pension scheme aims at providing financial assistance to nearly 40 lakhs rural people. The Samajwadi Pension Pension scheme is expected to replace the existing pension scheme in Uttar Pradesh namely Rani Laxmibai Pension Yojana..

Any family living below the poverty line can apply for this scheme.

The family should be based in Uttar Pradesh.

The main beneficiary should have a bank account either with SBI or any other nationalized banks.

THE ELIGIBILITY CRITERIA FOR SAMAJWADI PENSION YOJONA

Income taxpayers can’t apply for this scheme.Government employees are not eligible.Employees of private firms.Families whose members are enrolled for

other pension scheme such as Old Pension Scheme or any other scheme.

Families who own motor vehicle.Families who possess properties such as land

amounting to 0.5 hectare.

WHO CAN NOT APPLY FOR SAMAJWADI PENSION YOJANA?

The scheme provides a monthly pension of Rs. 500 each rural family.

The pension amount increases by Rs. 50 in the subsequent financial years.

The selection of the families would be done at the Gram Panchayat level.

The scheme is particularly designed for families living below the poverty line in Uttar Pradesh.

A bank account is mandatory to avail the benefits of this scheme.

The pension will be paid to the head of a family. It will transferred electronically to bank accounts of concerned individuals.

The Samajwadi Pension Scheme is available online. All districts of Uttar Pradesh are covered under this scheme.

KEY FEATURES AND BENEFITS OF SAMAJWADI PENSION YOJANA

Any family who participates in the Samajwadi Pension Yojana will receive a monthly pension of Rs.500.The government will issue a Samajwadi Pension Yojana Card which will act like a bank passbook and contain all records of the scheme. The scheme would select families at the gram panchayat level.

HOW DOES SAMAJWADI PENSION YOJANA FUNCTION?

The Samajwadi pension yojana suchi is available on the official website of Samajwadi Pension Yojana. The government of Uttar Pradesh recently launched the official website for Samajwadi Pension Yojana where along with the online application form, the list eligible pensioners or the suchi is also available. The only thing you have to do is to log-in to the website (sspy-up.gov.in) and get the suchi. The list has been uploaded district wise, block wise and village wise by by the Zila Samaj Kalyan adhikari.

SAMAJWADI PENSION YOJANA SUCHI

INDIRA GANDHI NATIONAL OLD AGE PENSION SCHEME

The Indira Gandhi National Old Age Pension Scheme (IGNOAPS) is old age non-contributory pensions scheme which covers those Indians who are above 60 years of age and also who live below poverty line. This pension scheme is National Social Assistance Programme’s (NSAP) part that the Ministry of Rural Development launched in August, 1995.

INTRODUCTION

• All the individuals are eligible who are above 59 years of age and below poverty line to apply for the IGNOAPS

Eligibility

All the beneficiaries of IGNOAPS of 60-79 years of age receive Rs. 200 as monthly pension. Those who are above the age of 80 years receive Rs. 500 as their monthly pension.

PENSION AMOUNT

NSAP has introduced social audit and annual verification. by 30 September they should complete their social audit each year. Under NSAP, a checklist is provided for the scheme is provided to National Level Monitors (NLMs) at the time of their visits. Monthly meetings are organised in Delhi of the Division Head with each UT/State’s Nodal officers.

MONITORING OF THE SCHEME

EMPLOYEES DEPOSIT LINKED INSURANCE

SCHEME

The EDLI scheme was launched in 1976, and applies to all employers who provide Employee’s Provident Fund (EPF) provisions to their employees. The point of the scheme is to provide life insurance coverage to all their employees.

INTRODUCTION

Subscription to EDLI:

The EDLI Scheme is clubbed and linked to the EPF scheme and EPS scheme. All employees who subscribe to the EPF scheme are automatically enrolled in the EDLI scheme.

Employee’s Provident Fund (EPF) contribution by Employee: 12%.

Employee’s Provident Fund (EPF) contribution by Employer: 12% minus EPS contribution.

Employee’s Pension Scheme (EPS) contribution by Employee: none.

Employee’s Pension Scheme (EPS) contribution by Employer: 8.33% (subject to a maximum of Rs.1,250).

EDLI contribution by Employee: none.

EDLI contribution by Employer: 0.50% (subject to a maximum of Rs.75)

CONTRIBUTIONS TO THE EDLI SCHEME

Employee Deposit linked insurance scheme is a comprehensive group term insurance. It covers the death of employee irrespective of the cause.

Every employee who is the member of Provident fund gets covered under EDLI.

The coverage is for 24 hours. It is not related to the working hours.

The coverage is for the whole earth. Being at the workplace is not necessary.

The insurance coverage is linked to the pay of the employee.

The coverage and premium is similar to every employee. Age or any individual factor does not make any effect.

RULES OF EDLI

The claim amount of the EDLI is decided by the last drawn salary of the employee. The claim amount would be the 30 times of the salary. Along with this, you would also get a bonus. This bonus would be 50% of the balance in your EPF account. The maximum bonus would be Rs 1.5 lakh. The maximum sum insured would be Rs 6 lacs. For this calculation salary is ‘basic pay plus DA’

THE INSURANCE CLAIM AMOUNT

Mr. Ram was employed and was actively contributing the EPF, EPS and EDLI schemes. He drew a monthly salary of Rs.15,000. Upon his death, his nominee claimed the EDLI insurance benefit which was equal to (30 x Rs.15,000) + (Rs.1,50,000) = Rs.6,00,000

EXAMPLE

PUBLIC PROVIDENT FUND

WHAT IS THE PUBLIC PROVIDENT FUND (PPF) SCHEME?

• The Public Provident Fund (PPF) Scheme, 1968 is a tax-free savings avenue that was introduced by the Ministry of Finance in India in the year 1968.

• Interest earned on deposits in the PPF account are not taxable. Deposits made towards PPF accounts can be claimed as tax deductions.

• It was launched to encourage savings among Indians in general, especially to encourage them to create a retirement corpus.

Interest rates: Interest rates are announced by the central government periodically, usually annually. Interest earned is compounded yearly. (The current rate of interest on a PPF account is fixed at 8.1% p.a.)

Tenure: 15 years; account continuance is allowed beyond maturity for 5 years at every renewal, with or without making additional deposits.

KEY FEATURES OF THE PPF SCHEME

Initial investment: Rs.100 to open the account

Annual Deposit amount: Rs.500 - Rs.1.5 lakhs per year (can be revised as per government directive) Failure to make an annual deposit, in any year, will lead to inactivation of the account.

Deposit frequency:A deposit has to be made every year, for 15 years, to keep the account active. Failure to make the minimum annual investment will render the account inactive.

DEPOSIT

Withdrawals: Partial premature withdrawals can be made every year from year 7; withdrawals are subject to conditions. Complete withdrawal of funds can be made only at maturity.Tax advantages: Interests are tax-free and deposited amounts are tax deductible U/S 80C of the Income Tax Act. Withdrawals are exempt from wealth tax.Nomination: Allowed; on opening the account or after.

WITHDRAWAL & TAX ADVANTAGES

Fund transfer: Funds/accounts cannot be transferred between people but can be easily transferred between bank branches or post offices for free.Loan facility: Loans can be availed against funds held in the PPF account from year 3 to year 6.Renewal: Renewal or extension of the scheme is allowed, for an extra 5 years at a time.Joint accounts: Not allowed.

OTHER FEATURES

BENEFITS

Attractive long-term

investments

Easily accessible

Low-riskTax-free returns

Useful for retirement planning

Form A - To open a Public Provident Fund Account

Form B - To make deposits into / repay loans taken against a PPF account.

Form C - To make partial withdrawals from a PPF account.

Form D - To request a loan against a PPF account.

Form E - To add a nominee to a PPF account.Form F - To make changes to PPF account

nomination information.

PPF FORMS

KYC documents such as identity proof, address proof and signature proof. These commonly include the latest version of a person’s.

Photographs, Passport, PAN Card, Aadhar Card, Driving License, Voter’s ID, Employer’s letter, Utility Bill, Rental/Lease Agreement, Bank Account Statements, Ration Cards, Signed Cheque.

The account opening form, along with nomination form if nominees are being named.

In case of minors, age proof will be required i.e. the minor’s birth certificate or school certificate.

DOCUMENTS NEEDED TO OPEN A PUBLIC PROVIDENT FUND ACCOUNT

2016 – 2017 8.1%2015 – 2016 8.7%2014 - 2015 8.7%2013 - 2014 8.7%2012 - 2013 8.8%2011 - 2012 8.6%2010 - 2004 8.0%2002 - 2003 9.0%2001 - 2002 9.5%2000 - 2001 11.0%

INTEREST RATES FOR PPF ACCOUNTS

THANK YOU…….