Group LIC’s Superannuation Plus
LIC’s SUPERANNUATION PLUS PLAN, is a unit linked defined contribution plan for management of Superannuation Funds. This plan is different from the traditional Cash Accumulation Plan as the returns under the Plan are linked to the performance of the chosen fund. SUPERANNUATION PLUS PLAN is suitable for companies with employees desiring to have flexibility of choice of investment.
ADVANTAGES OF THE LIC’s GROUP SUPERANNUATION PLUS PLAN:
- Choice of 4 funds to meet various risk appetites.
- Flexibility of building the fund subject to acceptable level of risk.
- Facility of Switching between various funds. Four switches every year are free of cost.
- There is no bid offer spread under this scheme.
- Scheme can be surrendered at any time after the date of payment of first contribution. The benefit on surrender will be subject to appropriate charges.
- Maintenance of individual member-wise account and hassle Free Administration of Scheme.
- Assistance for execution of legal documents and installation of scheme
- The Master Policyholder has the choice to invest the contributions in respect of individual member in any one of the following four funds:
|Fund Type||Investment in Government / Government Guaranteed Securities/Corporate debt||Short-term
Investment such as money market
|Details and objectives
of the fund for risk/return
|Bond Fund||Not less than 70%||Not more than 30%||Nil||Low risk|
|Income Fund||Not less than 60%||Not more than 30%||Not less than 10% & Not more than 40%||Steady Income—
Lower to Medium risk
|Balanced Fund||Not less than 50%||Not more than 30%||Not less than 20% &
Not more than 50%
|Balance Income and
growth— Medium risk
|Growth Fund||Not less than 40%||Not more than 30%||Not less than 30% &
Not more than 60%
|Long term Capital
growth— High risk
Note : The various funds offered are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.
- The allocation charge shall be 0.5% in the first year and nil in the subsequent years.
- Other charges : Administrative charges, Fund management charges, switching charges, surrender charges and service tax.
- The Policyholder has the choice of investing the Member wise allocated contributions in any one of the four fund types. Individual member-wise fund will be maintained. Any top up of the contributions in respect of the members can be made at any time during the membership period.
- The Net Asset Value (NAV) of each fund will be computed daily.
- FLEXIBILITY OF CONTRIBUTIONS : Policyholder may choose to pay contributions at any time during the policy year.
- Top-Up (Additional Contribution) : The policyholder can pay top-up of the contribution in respect of members at any time during the membership period.
BENEFITS UNDER THE SCHEME
- The amount available in respect of the member shall be the value of units in the member’s fund. A portion of the amount can be commuted if the scheme rules allow. The balance amount will be utilized to purchase immediate annuity, in respect of the member/beneficiary certified by Policyholder, at the then prevailing annuity rates. Both the commuted value and the annuity in respect of the member/beneficiary will be paid to policyholder. However the same can also be paid to the beneficiary directly with the consent of the policyholder. On exit of a member the amount available shall be the value of units. The value of units in respect of the member shall be the number of units held under the chosen fund type multiplied by the corresponding NAV.
- The policy can be surrendered at any time after the date of payment of first contribution. The benefit available on surrender of the policy shall be the total of value of units in respect of all Members taken together less appropriate surrender charge.
At all times the Policyholder’s unit account should be sufficient to cover the relevant charges and benefits payable at such point of time, subject to a minimum balance of Rs. Five lacs in the Policyholder’s Unit Account. In case the Policyholder’s Unit Account falls below this limit, the policy shall compulsorily be terminated and the balance amount in the policy holder’s Unit Account will be refunded to the policy holder.
The provisions relating to the approved Superannuation Scheme are set out in Part ‘B’ of the Fourth Scheme of the Income-Tax Act, 1961 and Part XIII of the Income Tax Rules , 1962. The income tax concession will be available only if the scheme is approved by the CIT.
- The annual contribution is treated as a deductible business expense in term of Section 36(1) (iv) of the I.T. Act.
- In terms of a Notification issued by the Central Board of Direct Taxes .80% of the contribution (s) towards the past service liability are treated as deductible business expenses spread over in the subsequent years of payment.
- The employee’s contribution , in the case of the Contributions scheme qualifies for exemption under Section 80C of the Income-Tax Act.
RISKS BORNE BY THE INDIVIDUAL MEMBER
The Value of the units is subject to market and other risks and there can be no assurance that the objectives of any of the above funds will be achieved. The value of units within each Fund can go up or down depending on the different factors affecting the capital markets and may also be affected by changes in the general level of interest rates and other economic factors. All benefits under the policy are also subject to the Tax Laws and other Financial enactments as they exist from time to time.
Please know the associated risks and the applicable charges from LIC’s P&GS Units or Policy Document .