SBI Life Pension Plans – National Pension Scheme SBI

SBI Pension Plan - Overview

As one of the leading insurance providers in India, SBI Life Insurance is a joint venture between the State Bank and BNP Paribas. SBI Life Insurance Company offers a wide range of Insurance product to cater to the requirement of insurance seekers. SBI Life Pension Plans are comprehensive retirement plans which are specifically designed to cater to the financial requirements of the individual after retirement.

SBI Life Pension Plans provide annuity payouts to the individuals after retirement. SBI pension plans are offered in two different options deferred annuity and immediate annuity plan. Before getting into the details of SBI pension plans, let’s take a look at the types of pension plans

National Pension Scheme SBI

The National Pension Scheme SBI refers to the NPS scheme launched by the Pension Fund Regulatory and Development Authority (PFRDA) to create a pension corpus, and which is managed by SBI through its subsidiary SBI Pension Funds Private Limited (SBIPFPL). The National Pension Scheme offers people in the 18-60 years age group the option to sign up for the plan and create a pension corpus for themselves in their retirement years.

SBIPFPL is one of the three pension fund managers appointed by PFRDA to oversee the pension corpus for government employees, and one of the six appointed to oversee the retirement corpus for citizens.

Salient features of National Pension Scheme SBI

• National Pension Scheme SBI is regulated by Pension Fund Regulatory and Development Authority and managed by SBI

• National Pension Scheme SBI is a voluntary scheme and allows any Indian citizen between the ages of 18 and 60 years to open a pension account

• The National Pension Scheme SBI account holders will each receive a Permanent Retirement Account Number (PRAN) that will remain fixed throughout the premium payment and pension payment periods

• Subscribers need to quote their PRAN in any National Pension Scheme SBI related matters including any correspondence or transaction

• National Pension Scheme SBI, like all other NPS schemes, will offer investors the option to open Tier I or both Tier I and Tier II accounts

  • A Tier I account under National Pension Scheme SBI is a mandatory account that does not allow the investor to withdraw their money. This helps to build a large corpus of regular investments

  • A Tier II account can only be opened under National Pension Scheme SBI by individuals who already have a Tier I account. It is a voluntary account and investors can withdraw money from the account to take care of their requirements. Bank details are compulsorily required to open a Tier II account under National Pension Scheme SBI

• Tier I account for National Pension Scheme SBI and other NPS schemes has the following requisites:

  • Account opening amount (min.): Rs. 500

  • Contribution amount (min.): Rs. 500

  • Account balance at year-end (min.): Rs. 6, 000

• Tier II accounts of National Pension Scheme SBI and other NPS schemes have the following requisites:

  • Amount Opening Amount (Min.): Rs. 1000

  • Contribution Amount (Min.): Rs. 250

  • Account Balance at year end (min.): Rs. 2, 000

• If subscribers wish to open both Tier I and Tier II account at the same time under National Pension Scheme SBI, then minimum investment amount is Rs. 1,500

• Investors can contribute till they reach 60 years under National Pension Scheme SBI and can stay invested till they reach 70 years if they prefer

• Subscribers can annuitize 40% - 100% of the pension corpus under National Pension Scheme SBI

• Investors in National Pension Scheme SBI can choose between three forms of investments:

  • High Risk and High Returns that mostly invest in equities

  • Medium Risk and Medium Returns that invest mostly in debt instruments

  • Low Risk and Low Returns that only invest in debt instruments

• The investments are made in 8 pension funds:

  • SBI Pension Fund

  • DSP Blackrock Pension Fund Managers

  • HDFC Pension Management Company

  • ICICI Prudential Pension Fund

  • Kotak Mahindra Pension Fund

  • LIC Pension Fund

  • Reliance Capital Pension Fund

  • UTI Retirement Solutions Pension Fund LIC Pension Fund

• National Pension Scheme SBI account holders can, like other NPS subscribers, opt for two forms of investment:

  • Active choice: Here investors can choose between the asset classes

  • Auto choice: The default option that invests the money according to the person’s age

• Subscribers can use the designated Points of Presence (POP) to pay their amounts under National Pension Scheme SBI or undertake any transaction. SBI is one of the POPs designated by PFRDA

• SBIPFPL charges an investment management fee of 0.01% pa to oversee National Pension Scheme SBI schemes

• Documents needed to open a National Pension Scheme SBI account are:

  • Subscriber registration form duly filled

  • Identity proof

  • Address proof

  • Age or date of birth proof

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Types of Pension Plans Offered by SBI

SBI Life Insurance Company offers three different types of Pension Plans to individuals to help them plan for their retirement. The plans offer great benefits to the individuals for a worry-free retired life. Let us take a look at the different types of pension plans offered by SBI Life and the features and benefits of each of the plans in details.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Best SBI Pension Plan

SBI Life Saral Pension Plan

A traditional pension plan with the following features and offering the following benefits:

• The SBI pension plan participates in the company’s profits and bonus is declared under the plan

• On Vesting the chosen Sum Assured including the Simple Reversionary Bonuses and Guaranteed Bonuses accumulated during the term of this SBI pension plan and a Terminal Bonus, if any is payable to the policyholder.

• The fund available on vesting under this SBI pension plan can be utilized in various ways. Commutation of a 1/3rd portion of the fund is possible tax-free and the remaining portion will pay annuities. Alternatively, one can also buy a deferred annuity plan by paying a single premium

• The vesting age can also be postponed by the policyholder of the SBI pension plan if he is aged 55 years or below. The maximum age to which the vesting can be postponed in 70 years

• On the death of the policyholder during the SBI pension plan tenure, higher of total premiums paid to grow at a compounded rate of 0.25% p.a. till the date of death or 105% of all premiums paid till death is payable to the nominee

• The death benefit can be withdrawn in lump sum or used to buy an annuity plan from the company

• Guaranteed Bonuses are added in the first 5 years of this SBI pension plan. The rate of addition is 2.50% of the Sum Assured for the first 3 years and 2.75% of the Sum Assured in the last 2 years.

• SBI Life Preferred Term Rider can be added to the base SBI pension plan to increase the coverage.

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Bajaj Allianz Pension Plans

Bharti AXA Life Pension Plans

Canara HSBC Pension Plans

Edelweiss Tokio Life Pension Plans

Future Generali Pension Plans

HDFC Life Pension Plans

ICICI Prudential Pension Plans

IndiaFirst Pension Plans

Kotak Life Pension Plans

Max Life Pension Plans

PNB MetLife Pension Plans

Pramerica Life Pension Plans

Reliance Life Pension Plans

Sahara Life Pension Plans

SBI Life Pension Plans

Shriram Life Pension Plans

Star Union Pension Plans

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Eligibility Details

SBI Life Retire Smart Plan

A unit linked pension plan with the following features:

• Besides market linked returns, the SBI pension plan also gives guaranteed additions to further increase the corpus

• Guaranteed Additions accrue @10% of the annual premium from the 15th year of this SBI pension plan till the end of the term

• Moreover, a Terminal Addition @1.5% of the Fund Value will be paid on the vesting date

• On vesting, higher of the applicable Fund value including the guaranteed additions and terminal additions or 101% of total premiums paid by the policyholder under this SBI pension plan are payable

• The vesting corpus can be withdrawn up to the extent of the 1/3rd portion and the remaining proceeds will be utilized to receive the specified pension. A deferred annuity plan can also be purchased with the entire proceeds if needed under SBI pension plan

• The vesting age can also be postponed by the policyholder if he is aged 55 years or below. The maximum age to which the vesting can be postponed in 70 years

• On death of the policyholder during the tenure of the SBI pension plan, higher of the available fund value including terminal additions or 105% of the premiums paid until death is payable to the nominee

• The death benefit can be withdrawn in lump sum or used to buy an annuity plan from the company by the nominees of the SBI pension plan policyholders

• The investments are managed under the Advantage Plan feature which systematically reduces risk exposure as the SBI pension plan nears the vesting date to keep the investment secure

• The SBI pension plan has 3 fund options under the Advantage Plan which are Equity Pension Fund II, Bond Pension Fund II and Money Market Pension Fund II

Eligibility Details

SBI Life Annuity Plus Plan

This is an Immediate Annuity plan which has the following aspects:

• The annuity is paid is paid immediately once the single premium is deposited with the insurer under the SBI pension plan

• There are two annuity options under the SBI pension plan. The first option is for a single life and the second option is for a joint life annuity. Both the options are further sub-divided into further annuity payout options.

• The annuity payout options under the Single Life Annuity option are:

• Lifetime Income

• Lifetime Income with Capital Refund

• Lifetime Income with Capital Refund in parts

• Lifetime Income with Balance Capital Refund

• Lifetime Income with Annual Increase of 3% or 5%

• Lifetime Income with Certain Period of 5, 10, 15 or 20 years

• The annuity payouts under the second option of joint life annuity include:

• Life or Last Survivor with 50% or 100% of the income

• Life or Last Survivor with 50% or 100% of the income and Refund of capital

• The policyholder of this SBI pension plan may avail advance annuity payouts in compliance with certain terms and conditions

• An Accidental Death Benefit Rider can be availed under the SBI pension plan up to a maximum coverage of Rs.50 lakhs

• The company promises higher rates of annuity payouts for higher premiums

Eligibility Details

Features of SBI Pension Plans

• Pension plans are offered both as a traditional plan and as a market-linked insurance plan. While immediate annuity plans come only from the traditional variant, deferred annuity plans might be in any of the above-mentioned variants of traditional or unit linked plan

• Pension plans do not allow the policyholder to withdraw the entire accumulated corpus. The plans pay pensions from the corpus which can be received yearly, half-yearly, quarterly or monthly. Pension payments are the only benefits which accrue from the plans. However, the plans to allow the policyholder to withdraw a maximum of a 1/3rd portion of the corpus which is accumulated if the policyholder so desires. This withdrawal is called commutation and will not be subject to any tax under the provisions of Section 10(10A). The rest of the corpus which is paid as the annuity is taxable in the annuitant’s hands as it is treated as an income.

• The premiums which are paid for Immediate Annuity plans are tax-free under Section 80CCC while the death benefit paid in respect of Deferred Annuity plans will earn tax exemption under Section 10(10D) as is common with other insurance plans.

• Pension plans, both Deferred and Immediate Annuity plans, do not earn any bonus.

• Immediate Annuity plans can be taken on a joint life basis. This means that both the annuitant and the spouse would become eligible to earn annuity payments from the company. The annuitant will be called the primary annuitant while the spouse will be the secondary annuitant. First, annuity payments will be paid till the life of the policyholder who is the primary annuitant and post his death, the payments will be made till the lifetime of the spouse who is the secondary annuitant.

• While there is no death benefit option in the immediate annuity variety of pension plans, deferred annuity plans are eligible to have a death benefit. If the policyholder dies during the accumulation phase, a specified death benefit is paid to his nominee. This benefit depends on the company and the plan design offered by the company. The nominee has two options for dealing with the death benefit. The first option is that he takes the death benefit in one lump sum and chooses to use it as per his discretion. The other choice is to avail annuity from the proceeds payable on death. The nominee can avail annuity payments from the company on his own life without withdrawing the death benefit in a lump

• Pension can be availed under both plan options either in the monthly, quarterly, and half-yearly or annual mode as chosen by the policyholder.

You may also compare: Saral Pension Yojana

How to Apply for SBI Pension Plan?

Online

The company offers specific plans which are available online only. The customer only needs to log into the company’s website, choose the required plan, choose the coverage and provide the details. The premium will be determined using the filled details. The customer then needs to pay the premium online through credit card, debit card or net banking facilities and the policy will be issued

Intermediaries:

Plans which are not available online can be purchased from agents, brokers, banks, etc. where the intermediaries help with the application process.

SBI Pension Plan - FAQ