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 – UTI Infrastructure Technology And Services Limited

Year 2012Year 2042

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. WHAT IS PENSION ?

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 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 assumed rate of growth X Y Assuming a growth of 10% CAGR in both the cases, X’s investment would appreciate to ` Lacs and Y’s Investment would appreciate to ` That means X’s investment would appreciate to almost double that of Y’s

Life Stages

Projection of Earnings & Expenses AGE EARNING & EXPENSES Just Employed Marriage and house hold expenses Children and education Planning for Retirement & Above Education Retired Life

INCOME REQUIREMENTS ON RETIREMENT

NEW PENSION SYSTEM A VIDEO FILM

 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 WHY NATIONAL PENSION SYSTEM(NPS)?

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.

 Equity (not more than 50% of total Investment)  Corporate Bonds (No Limit)  Government Bonds (No Limit) ACTIVE CHOICE

TABLE FOR AUTOCHOICE (LIFECYCLE FUND) AgeAsset Class EAsset Class CAsset Class G Up to 35 yrs50%30%20% 36 yrs48%29%23% 37 yrs46%28%26% 38 yrs44%27%29% 39 yrs42%26%32% 40 yrs40%25%35% 41 yrs38%24%38% 42 yrs36%23%41% 43 yrs34%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.

 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 ROLE OF POINT OF PRESENCE (POP – UTIITSL)

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 OTHER SERVICES

Recordkeeping and Administration Issue of PRAN Number Maintenance of Databases Coordination between various Intermediaries Role of Central Record keeping Agency (CRA)

 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 PENSION FUNDS MANAGERS

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.

 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. 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. Pension benefits shall be given by the Annuity Service Providers

 (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)). 06 Types of Annunities under NPS

 NPS Trust (overall Controlling Body)  NPS Trustee Bank (Intermediary for Fund collection from POPs and depositing in the PFMs and withdrawals)  Custodian OTHER INTERMEDIARIES

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)

Offers Tier II account which is a voluntary savings facility with anytime liquidity/withdrawal option Grievance management through CRA Website, Call Center, 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. SERVICES TO SUBSCRIBERS

A citizen of India, whether resident or non-resident can join NPS subject to the following conditions :  Subscriber should be between 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). ELIGIBILITY NORMS

OPERATIONAL FEATURES OF NPS ParticularsTier ITier II Option of Selection of Account Mandatory Optional Initial contribution at the time of account opening Rs.500Rs.1000 Minimum amount per contributionRs.500Rs.250 Minimum account balance at the end of Financial Year As applicable Rs.2000 Minimum amount of contribution per annum Rs Minimum Number of Contributions/Annum One 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 medi ary Charge HeadService Charges Method of Deduction CRA PRAN Opening ChargesRs. 50 Through cancellation of units Annual PRAN Maintenance Cost per account Rs.225 Charge per transactionRs. 6 POP Initial subscriber registration and contribution upload Rs.100 To be collected upfront Any subsequent transaction % of the Contribution Amount subject to a Minimum of Rs.20/- per contribution

IntermediaryCharge HeadService Charges Method of Deduction Trustee Bank Per transaction emanating from a RBI location Zero Through NAV deduction Per transaction emanating from a Non-RBI location 4 Rs.15 Custodian Asset servicing charges % p.a. for electronic segment & 0.05% p.a. for physical segment Through NAV deduction PFM charges Investment Management fee % p.a. wef 01/11/2012 Through NAV deduction Contd…

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 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 NPS – How is it Beneficial for Corporate

 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 BENEFITS TO CORPORATES

EXAMPLE 1 EXAMPLE 2 EXAMPLE 3 Without NPS Contribution With NPS Contribution Without NPS Contribution With NPS Contribution Without NPS Contribution With NPS Contribution Annual Salary 10% Tax Bracket 20% Tax Bracket 30% Tax Bracket Basic Pay HRA(50%) Professional Allowance Contribution to PF (12%) Contribution to Gratuity(4.81%) Contribution to NPS Gross Salary Deductions Section 80 C (includes Employee Contribution to Mediclaim Section 80CCD(2) Total Total Income Taxable Income Tax Liability Tax Savings

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