What is QROPS under Jeevan Shanti Policy?
LIC’s Jeevan Shanti policy is a traditional pension plan which offers policyholders two options of receiving pensions. The policy can be bought as an immediate annuity plan wherein the annuitant can choose to receive annuity pay-outs immediately after buying the plan. Alternatively, the policy can also be bought as a deferred annuity plan wherein annuity payments would be paid after a deferment period. The plan requires a single premium and offers good annuity pay-out options.
Besides offering good annuity payment options, Jeevan Shanti also qualifies as QROPS and offers pension benefits to expatriates who previously worked in the United Kingdom and now want to move their pension fund from UK to India. Let’s understand the concept of QROPS in details –
What is QROPS?
QROPS stands for Qualifying Recognised Overseas Pension Scheme. It is an overseas pension scheme which meets the requirements prescribed by Her Majesty’s Revenue and Customs (HRMC) in the UK. Indian expatriates who have worked in the United Kingdom and have accumulated a pension fund can move their pension fund to India and receive pension from pension schemes operating in India which are registered as QROPS. There would be no unauthorised payment and scheme sanction charge on moving the pension fund from overseas to India.
QROPS under Jeevan Shanti Policy
LIC’s Jeevan Shanti policy can be purchased as QROPS wherein the policyholder can buy the policy with the pension benefits accumulated overseas. However, to buy the policy as QROPS, the following criteria, as specified by Her Majesty’s Revenue and Customs (HRMC) should be fulfilled –
- If the policyholder is buying Jeevan Shanti policy as an immediate annuity policy, the minimum age at entry should be at least 55 years. On the other hand, if the policyholder is opting for the single premium deferred annuity option, the minimum age at the time of vesting of the policy should be at least 55 years.
- If the policy is cancelled by the policyholder during the allowed free-look period, the amount which is payable on cancellation of the policy would be credited to the fund house from where the premium was received in the first place.
- If there is a tax charge which is payable for the overseas transfer of the pension fund and LIC is liable to pay the transfer charge, then the charges would be deducted by LIC from the fund transferred to the policyholder. The deducted amount would then be deposited by LIC to Her Majesty’s Revenue and Customs (HRMC)
- Any other terms and conditions which are applicable under Her Majesty’s Revenue and Customs (HRMC) would apply to the scheme from time to time.
So, if any Indian has worked in the United Kingdom and wants to transfer his or her pension funds from a UK pension fund to India, he/she can do so by buying LIC’s Jeevan Shanti policy. The policyholder can choose the desired annuity option and avail annuity pay-outs on his own life and also on a joint life basis.