Group Superannuation

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Pension plans provide financial security as well as gives an opportunity to invest and accumulate savings and get lump sum amount at regular intervals through annuity plan on retirement. Pension reforms to the National pension scheme offers a large variety of investment options to employees. The New Pension Scheme available to all Indian citizens structurally consists of three types of accounts:

  • Tier I Account: subscribers cannot withdraw funds before they retire.
  • Tier II Account: subscribers are free to invest funds as well as withdraw funds as per their convenience.
  • Swavalamban Account: In this account Indian government contributes a sum of Rs 1,000 every year over the initial four years. Mainly aimed at unorganized sector workers.

As an employer, you want to give get the best schemes for your employees. Hence here are few benefits of the New Pension Scheme:

  • Tax benefits: For Tier-I accounts as per section 80CCD(1b) budget 2015 offers additional tax benefit of Rs. 50,000 under section 80CCD of the Income Tax Act, 1961. Investors can, therefore, avail of (maximum) a tax benefitof Rs. 2 lakhs.
  • Post Maturity Tax Benefits: For Tier-I account a portion of the amount post maturity is also tax free.
  • Equity Exposure: Only retirement plan which offers equity exposure as high as 50% as compared to other traditional retirement schemes such as EPF and Public Provident Fund.
  • Charges: Comparatively lower costs in comparison to EPF and Mutual Funds. Also, no need to pay the charges separately, as they are deducted from the annual value.
  • Employer Contribution: An employer’s contribution can be shown as deduction under section 36 I (IV) from business income.
  • Operational Efficiencies: The scheme has transparent investment norms and comes with a lot of flexibilities which allow you to choose your investment options. You can also switch between different investment funds and operate it from anywhere in India.

Read More: What are the Superannuation benefits in India?

A Case of Understanding Pension Reforms and its Benefits

Zentech Technologies a software firm located in Bhopal has opted for getting the New Pension Scheme for its employees from last year. Most of the employees within the age group of 25 to 45 have opted for the tier I option as it helps them plan their retirement and they are sure of receiving assured returns at retirement.

Also, several employees are now able to avail a maximum tax benefit of Rs.2 lakhs in comparison to the 1.5 lakhs. With lower charges in comparison to their other Mutual Funds and higher equity exposure as compared to EPS and PPF, this is the perfect scheme for employees to fit into their retirement corpus.

About The Author


MBA Finance

With seven years of experience in the insurance industry, Trisha is a recognized expert in group superannuation. As a dedicated writer for SecureNow, she crafts insightful blogs and articles that clarify the complexities of group superannuation schemes. She is passionate about educating businesses on the benefits and management of retirement plans, making technical details accessible and practical. Their deep understanding of superannuation regulations and best practices ensures that readers receive up-to-date and valuable information, establishing Trisha as a trusted voice in the insurance community.