New pension plan likely to fetch Rs 25,000 crore for LIC

“In the current market, the new pension scheme as announced by the FM is the only product which is guaranteeing nine per cent as the return from other products like small savings and the RBI Relief Bond has been slashed and banks are giving below 6 per cent return”, say senior professionals from private sector life insurance companies adding that all of these life insurance companies which have launched unguaranteed pension plan have met with a huge success. Had it been that such a return would not have been guaranteed by the centre and been just another product from LIC, the expected response would not be that overwhelming, they said. The attractive interest rate is the only reason why private sector life insurance companies have been critical about the FM’s move to hand over the entire scheme to LIC.

Experts point out that along with the economy, the nature of the domestic demography is changing. The average Indian’s life span has increased from 32 years in 1932 to 64 years in 2000. It will be 68 years and 76 years in 2011 and 2031. It is also estimated that number of the elderly will cross 113 million in few years time and will be at 15 per cent of the entire population by 2031. Present statistics show that a staggering 89 per cent of the working population does not have any pension investment.