Management- Practices of Life Insurance PENSION Pension is an arrangement to provide people with an income when they are no longer earning a regular income. Types Of Pension Employment based pension Social & State pension Defined benefit pension plan Advantages Define contribution Benefits of pension plans Retirement income benefits Workforce retention benefits CLASSES OF PENSION Compensation pension

1. TRINITY INSTITUTE OF PROFESSIONAL
STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75
Affiliated Institution of G.G.S.IP.U, Delhi
BBA (B&I)
Practices of Life Insurance
(18305)
Pension –
By: Ratika Malhotra

2. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
PENSION
1. Pension is an arrangement to provide people with an
income when they are no longer earning a regular
income.
2. Pension is a periodical payment made by or on behalf
of an employer usually in recognition of part services.
3. It may be paid to person who provide those services
or to his/her dependents.
4. A recipient of retirement pension is known as
pensioner or retire.

3. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
1.Employment based pension;
It is an arrangement to provide people with an income during
retirement when they are no longer earning a income from
employment.
2.Social & State pension;
In India social pension benefits are given to senior citizen.(it
include people living below poverty line,withraw disable
etc).senior citizen are those who have attained 60 years of age
amt varies from state to state.

4. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Defined benefit pension plan
1.It is a type of pension plan in which employer promise a
specified monthly benefit on retirement that is
predetermined by a formula. This formula is based on
number of factors such as average salary before retirement,
length of service & age at retirement.
2.The pension amt is known & is not dependent on any
external factor or investment decision this scheme is called
benefit pension scheme.
3.The amt collected under this plan is invested and earn some
return. but irrespective of the kinds of returns generated by
investment, individual pension amt is assured.

5. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
1.Benefit of pension amount is defined. This
gives peace of mind.
2.Individual need not have to worry about how
the investment would perform. Companies
makes all the decision regarding investment.

6. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
In this type of a pension plan, the pension
amount is not known beforehand. Also,there is
no fixed formula based on which your pension
would be determined. Instead, this is what
happens: you keep contributing the amt
towards your pension throughout your
working life. the amt is invested on your
behalf, and the pension that you get after
retirement depends on the returns generated.

7. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
• 1.Tax benefits: pension plans also provide valuable tax benefits.
Many pension plans are tax deductable.
• 2.Insurance benefits: pension plans have an insurance benefits in
that they often provide payments to disabled beneficiaries and
survivors.
• 3.Workforce retention benefits: pension plans provide employers
with a tool in retaining workers. That workers who value their
retirement plans are more likely to stay with their employer.
• 4.Retirement income benefits: a pension plans is a payment
arrangement by employers to provide retirement, disability and
death benefits to their employees. While payment of future
retirement income is the primary benefit of pensions.

8. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
CLASSES OF PENSIONCLASSES OF PENSION
1.Superannuation:a superannuation pension shall be granted to a
government servant who is retire on his attaining the age of 60 years.
2.Retiring pension: a retiring pension shall be granted to a government
servant who retire, or is retired before attaining the age of
superannuation or to a government servant who, on being declared
surplus opts, for voluntary retirement.
3.Invalid pension; invalid pension may be granted if a government
servant applies for retirement from the service on account of any
bodily or mental infirmity which permanently incapacitates him/her
for service. the request for invalid pension has to be supported by
medical report from the competent medical board.

9. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
CLASSES OF PENSIONCLASSES OF PENSION
4.Compensation pension; if a government servant is selected for
discharge owing to the abolition of a permanent post, he shall
unless he is appointed to another post the condition of which are
deemed by the authority competent to discharge him/her to be at
least equal to those of his own.
5.Compulsory retAirement pension: a government servant
compulsorily retired from service as a penalty may be granted, by
the authority competent to impose such penalty, pension or gratuity,
or both at a rate not less than two-thirds and not more than full
compensation pension or gratuity, or both admissible to him on the
date of his compulsory retirement.

10. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
NPS (National Pension System)
• NPS (National Pension System) is a defined contribution based
Pension Scheme launched by Government of India. It is based
on a unique Permanent Retirement Account Number (PRAN)
which is allotted to each Subscriber upon joining NPS.
• The Government of India in exercise of their executive powers
adopted 'National Pension System' (NPS) based on defined
contributions in respect of all new entrants to Central
Government services, excepting the Armed Forces, with effect
from 1st January 2004. Most of the State Governments have
since notified a similar pension system for their new entrants.
NPS accumulates savings into subscribers PRA while he is
working and use the accumulations at retirement to procure a
pension for the rest of his life.

11. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
NPS (National Pension System)
• PFRDA has also made NPS available to all citizens of India, with
effect from 1st May 2009 on a voluntary basis. In pursuance
to PFRDA's commitment to make available an avenue for saving for
old age to all sections of society, PFRDA has now launched a
separate model to provide NPS to the employees of corporate
entities, including PSUs since December 2011. This model is titled
"NPS - Corporate Sector Model".
The NPS Scheme offers 2 types of account
• Tier I account – it is also known as Pension Account. Withdrawal
from this account is restricted till the Subscriber attains the age 60
years. Minimum yearly contribution requirement in this account is
Rs.6000.

12. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
NPS (National Pension System)
• Tier II account – it is a normal investment account.
Withdrawal from this account can be done as per the need of
the Subscriber. Minimum yearly contribution requirement in
this account is Rs.250 however on 31st March of each year
total value of units in this account should be equal to or more
than Rs.2000
• An active Tier I account is mandatory for opening Tier II
account. Tier II account can be opened along with Tier I
account or at any time after Tier I account opening.