HOW PRIVATE PENSION FUNDS WILL WORK HOW ARE THESE DIFFERENT FROM EPFO AND OTHER CURRENT PENSION PLANS?
Unlike EPFO, the pension plans will not be mandatory. At present, the only competing plans are offered by some insurance companies but these are mostly in the nature of annuities WHAT RETURNS CAN I EXPECT? The schemes will not offer assured returns. The experience with the contributory pension scheme for the central government employees who joined from January 1, 2004, shows that returns can be over 8 per cent DO I GET A TAX BREAK? Present norms mandate tax at the time of withdrawal but the pension regulator is seeking an amendment to the tax laws. The other option is to invest the entire maturity value in annuities and avoid paying tax CAN I CHANGE MY FUND MANAGER? Subscribers will be allowed to change not just the fund manager but also the investment pattern. HOW WILL THE SCHEMES WORK? Investors can go to the ‘points of presence’ like banks and select their fund manager and the scheme. They will receive a permanent retirement account number (PRAN) from the central record-keeping agen
