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If you are planning to buy a pension plan from an insurer, you will get an assured minimum return on maturity.
At present, it is mandatory for insurers to provide a guaranteed annual rate of return at 4.5 per cent.
The Insurance Regulatory and Development Authority (IRDA) has dropped the minimum guaranteed return of 4.5 per cent.
In its draft guidelines on pension products, the regulator said a pension product should have an assured benefit at the time of sale.
Effectively, this delinks minimum guarantee from the reverse repo rate. In its earlier norms announced in September 2010, IRDA asked the insurers to ensure a return of 50 basis points over revere repo rate.
Instead, there would a capital guarantee which can vary depending on the type of product.
The pension plans offered by insurers may have an optional insurance cover throughout the deferment period or approved riders.
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