Co to unveil unit-linked group pension plan soon

PUNE: LIC’s set to unveil its first unit-linked group pension product for corporates. The product, Gratuity Plus, has been approved by Irda and will be launched next week. Corporates can subscribe to this plan for their staff. LIC is the second-largest pension fund manager after the Employees Provident Fund Organisation.

Corporates subscribing to group products under these plans can choose the level of exposure they want in equities. LIC also plans to apply for group super-annuation product under the unit-linked, Superannuation Plus. A pension plan or an annuity is an investment that is made either in a single lump sum payment or via instalments paid over a number of years, in return for a specific sum received every year, every half-year or every month, either for life or for a fixed number of years.

Simply put, they can choose between investments in debt, balanced or equity funds. Income tax breaks are also available to corporates offering pension benefits to their employees.

Annuities differ from other forms of insurance - they don’t provide life insurance cover but only offer guaranteed income either for life or a certain period. Typically, annuities are bought to generate income post-retirement.

The corporation’s market share in all the group schemes stood at around 83.7% at the end of March this year. It’s share in the new business premium was around 78.7%. This fiscal, LIC expects to get a group business of around Rs 4,000 crore (new business premium) in FY07, Mr Venugopal said. Sales of group insurance schemes account for around 15% of LIC’s total business premium.