NPS
ESPAC is the preferred partner of ICICI Prudential Pension Fund
About NPS
Ensuring the rest of your life is the best of your life!
A beautiful house, a world tour, or a relaxed life – retirement can be about all this and much
more. Ensuring the lifestyle, you deserve in your golden years is all about choosing the right
retirement plan which gives you growth, flexibility, and security for your hard-earned money.
Here is a solution that gives you all you have always wanted and much more – National Pension System (NPS). NPS is a government backed pension fund which gives you regular income post-retirement with a whole lot of other benefits.
NPS RETAIL SOLUTION
Save tax while saving for your future along with the growth of your money, you get an added advantage of tax benefits with NPS Retail Solution. You can save tax up to Rs.15,600 per year.
NPS gives you the freedom to invest your money as per your choice. It offers 2 options to choose from basis your comfort – Active choice and Auto choice. Let’s understand these options in detail below:
If you are someone who likes complete control of your investments, this is a perfect choice for you. Here you can decide the distribution of your money basis your expected returns.
You can invest in the below asset classes:
• Asset Class E (Equity) – Investments in equity market instruments.
High Risk | High Return
• Asset Class C (Corporate bonds) – Investments in fixed income instruments.
Moderate Risk | Moderate Return
• Asset Class G (Government bonds) – Investments in Government securities.
Low Risk | Low Return
• Asset Class A (Alternate assets) – Investments in instruments like CMBS, MBS, REITS, AIFs, etc.
Very High Risk | Very High Return
While you have the freedom to decide your investments under NPS, there are certain boundary conditions. These are as below:
– You can invest a maximum of 75% of your pension wealth in equity (Asset class E).
– You can invest a maximum of 5% of your pension wealth in Alternate assets (Asset class A).
– You can invest your entire pension wealth in C or G asset classes.
– You have the option to change your investment choice twice a year.
For your ease and convenience NPS gives you an option to plan for your retirement with an auto choice. Here, basis your requirement.
You can choose between 3 life cycle options:
• LC 75 –This lifecycle offers you higher returns at a higher risk.
• LC 50 – This lifecycle offers you moderate returns at moderate risk.
• LC 25 – This is a low risk- return option.
Basis what you choose, your money will be invested in various asset classes. The distribution percentage of money is mentioned below:
Asset Allocation under LC 75
| Age | Equity | Corporate Bonds | Govt. Securities |
|---|---|---|---|
| < = 35 Yrs | 75% | 10% | 15% |
| 36 | 71% | 11% | 18% |
| 37 | 67% | 12% | 21% |
| 38 | 63% | 13% | 24% |
| 39 | 59% | 14% | 27% |
| 40 | 55% | 15% | 30% |
| 41 | 51% | 16% | 33% |
| 42 | 47% | 17% | 36% |
| 43 | 43% | 18% | 39% |
| 44 | 39% | 19% | 42% |
| 45 | 35% | 20% | 45% |
| 46 | 32% | 20% | 48% |
| 47 | 29% | 20% | 51% |
| 48 | 26% | 20% | 54% |
| 49 | 23% | 20% | 57% |
| 50 | 20% | 20% | 60% |
| 51 | 19% | 18% | 63% |
| 52 | 18% | 16% | 66% |
| 53 | 17% | 14% | 69% |
| 54 | 16% | 12% | 72% |
| 55 | 15% | 10% | 75% |
Asset Allocation under LC 50
| Age | Equity | Corporate Bonds | Govt. Securities |
|---|---|---|---|
| < = 35 Yrs | 50% | 30% | 20% |
| 36 | 48% | 29% | 23% |
| 37 | 46% | 28% | 26% |
| 38 | 44% | 27% | 29% |
| 39 | 42% | 26% | 32% |
| 40 | 40% | 25% | 35% |
| 41 | 38% | 24% | 38% |
| 42 | 36% | 23% | 41% |
| 43 | 34% | 22% | 44% |
| 44 | 32% | 21% | 47% |
| 45 | 30% | 20% | 50% |
| 46 | 28% | 19% | 53% |
| 47 | 26% | 18% | 56% |
| 48 | 24% | 17% | 59% |
| 49 | 22% | 16% | 62% |
| 50 | 20% | 15% | 65% |
| 51 | 18% | 14% | 68% |
| 52 | 16% | 13% | 71% |
| 53 | 14% | 12% | 74% |
| 54 | 12% | 11% | 77% |
| 55 | 10% | 10% | 80% |
Asset Allocation under LC 25
| Age | Equity | Corporate Bonds | Govt. Securities |
|---|---|---|---|
| < = 35 Yrs | 25% | 45% | 30% |
| 36 | 24% | 43% | 33% |
| 37 | 23% | 41% | 36% |
| 38 | 22% | 39% | 39% |
| 39 | 21% | 37% | 42% |
| 40 | 20% | 35% | 45% |
| 41 | 19% | 33% | 48% |
| 42 | 18% | 31% | 51% |
| 43 | 17% | 29% | 54% |
| 44 | 16% | 27% | 57% |
| 45 | 15% | 25% | 60% |
| 46 | 14% | 23% | 63% |
| 47 | 13% | 21% | 66% |
| 48 | 12% | 19% | 69% |
| 49 | 11% | 17% | 72% |
| 50 | 10% | 15% | 75% |
| 51 | 9% | 13% | 78% |
| 52 | 8% | 11% | 81% |
| 53 | 7% | 9% | 84% |
| 54 | 6% | 7% | 87% |
| 55 | 5% | 5% | 90% |
Things to keep in mind:
Reallocation among the asset classes shall take place on your date of birth every year.
You may change your preference only twice, at any time during the financial year.
Benefits of NPS
NPS gives you an option to plan for your retirement as per your comfort.
TAX BENEFITS
No matter whether you are salaried or self-employed, you can save tax under multiple sections.
Salaried individual
You are eligible for a deduction of taxable income of up to:
– Rs.50,000 under Section 80CCD (1B), over and above limit of Rs.1,50,000 under Section 80C
– 10% of your salary (Basic + Dearness allowance) under Section 80CCD(1) of Income Tax Act, 1961 subject to a limit of Rs.1,50,000 under Section 80C
Self-employed individual
You are eligible for a deduction of taxable income up to:
– Rs.50,000 under Section 80CCD (1B) over and above the limit of Rs.1,50,000 under Section 80C
– 20% of your gross annual income under Section 80CCD(1) of Income Tax Act, 1961 subject to a limit of Rs.1,50,000 under Section 80C
PORTABLE
You can operate the NPS account from anywhere across the country even if you change your city, job, etc.
You can operate the NPS account from anywhere across the country even if you change your city, job, etc.
PORTABLE
SAFE & SECURE
NPS is regulated by a Government agency PFRDA (Pension Fund Regulatory and Development Authority) making your investments safe and secure.
FLEXIBLE
NPS gives you the flexibility to choose between various investment schemes, pension fund managers and annuity service providers as per your comfort and preference.
NPS gives you the flexibility to choose between various investment schemes, pension fund managers and annuity service providers as per your comfort and preference.
FLEXIBLE
LOW COST
NPS has one of the lowest administrative and fund management charges, making it the one of the lowest cost pension schemes.
Address
162/B/203, Lake Gardens,
Flat no, 23, Vaijayanti,
Kolkata - 700045. WB, India
espac@espac.in
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