KOTAK LIFE INSURANCE - GROUP PLANS - Superannuation Grouplan

Value your employees service and guid them to get a prospective income on their retirement savings in large than ever, some employees take time to plan their long-term financial goals or make a perfect plan and systematically save for their retirement years. As an employer of choice, you can help your employees tremendously by assisting in their retirement planning cover and in turn increase employee retention. The solution lies at Kotak Life Insurance’s Superannuation Grouplan.

How does the Group Superannuation plan work?

The Kotak Superannuation Grouplan (KSGP) is a uniquely flexible product that addresses the needs of both the employers and the employees. Under this plan, individual employee accounts are invested in one or many investment portfolios on a unitized basis as per each employee’s choice. Parameters such as eligibility criteria for fund membership, vesting guidelines, contribution rates, transfer rules and voluntary contributions are all designed as per each employer’s unique needs.

How will KSGP help me as an employer?

We understand that your employees are your most valuable assets. By helping them to provide a better and convineant savings for their retirement, you help to increase employees retention and motivation. Moreover: as per the Finance Act’ 2006, annual contributions made by an approved superannuation trust upto Rs. 1,00,000 per employee can be claimed as deductible business expenses under section 115 WB (1C) read with section 115 WC (1)(b) of the Income Tax Act, 1961. Any contribution beyond the prescribed limit will qualify for Fringe Benefit Tax. Income earned on investments by an approved superannuation trust is tax-exempt under section 10 (25) (iii) of the Income Tax Act, 1961. The amount of deduction available on initial as well as ordinary annual contribution to an approved superannuation fund shall not exceed 27% (including the contribution to Provident Fund) of the employee’s annual basic salary for each year of his service under section 36 (1)(iv) of the Income Tax Act, 1961.

How does KSGP help my employees?

KSGP gives your employees unparalleled flexibility and peace of mind.
Any employee contribution towards an approved superannuation fund qualifies for tax deduction under section 80 C of the Income Tax Act, 1961.
At the time of retirement or death, employee or employee’s nominee (as the case may be) can commute part of the accumulated fund amount as a tax-free lump sum under section 10 (10A) and section 10 (13) of the Income Tax Act, 1961. The balance amount must be used to buy annuity from either Kotak Life Insurance or any other insurer in the market at the then prevailing rates.
At the time of withdrawal from service, employee has an option to either transfer his superannuation account to his/her new employer (if the latter provides for that) or leave his account with the trust or commute part of the accumulated fund and buy an annuity from the balance amount from either Kotak Life Insurance or any other insurer in the market at the then prevailing rates.

Minimum group size: 10 members
Minimum entry age: As specified in the Trust Rules or18 years, whichever is higher.
Maximum cover age: As specified in the Trust Rules, or 65 years whichever is lower
Minimum Term: One year. This is an annually renewable plan.

What investment options do I have?

There are a number of investment options available to your employees depending on their financial goals and risk appetite. Kotak Life Insurance offers a variety of investment funds to help your employees achieve the best investment performance of their individual needs. We offer the following eight investment options
:
Investment Option Objective Risk - Return Profile Equity Debt Cash & Money Market
Kotak Aggressive Growth Fund Aims for a high level of capital growth by holding a significant portion in equities. May experience high levels of shorter term volatility (downside risk)
Aggressive 60%-100% 0%-40%
Kotak Growth Fund 40%-80% 20%-60% 0%-20%

Kotak Group Balanced Fund Aims for moderate growth by holding a diversified mix of equities and fixed interest instruments. May also be susceptible to moderate levels of shorter-term volatility (downside risk) Moderate 30%-60% 20%-70% 0%-20%

Kotak Group Dynamic Floor Fund Aims to provide stable long term inflation beating growth over the medium to longer term and defend capital against short term capital shocks.Is likely to out-perform traditional balanced or equity funds during sideways or falling markets and shadow the rising equity markets Cautious 0%-75% 0%-100% 0%-20%

Kotak Group Bond Fund Returns will be in line with those of fixed interest instruments, and may provide little protection against unexpected inflation increases Will preserve capital and minimize downside risk, with investment in debt and government instruments. Conservative - 0%-100%
(Debt and Infrastructure securities- 25%-100%) 0%-20%

Kotak Group Floating Rate Fund - 0%-75% (Floating Rate debt instruments- 25%-100%) 0%-20% , Kotak Group Gilt Fund - 80%-100% 0%-20%

Kotak Group Money Market Fund Will protect capital and not have downside risks Secure - 100%

Note: The aggregate exposure across the portfolios selected by the clients to equities should not exceed 60% of the total market value and to cash (money market instruments) should not exceed 20%.

Investment Management Philosophy
Kotak Group’s investment philosophy works on the principles of transparency, flexibility and well-defined investment portfolios.

Unit Allocation
Allocation of contribution to each fund would be done on a unitized basis as per the prevailing IRDA guidelines.

Calculation of Net Asset Value (NAV):
(Market Value of investment held by the fund +/- the expenses incurred in the purchase/sale of assets + value of Current Assets + any accrued income net of fund management charges – value of Current Liabilities- Provisions) divided by (Number of units existing at the valuation date)

The risk profile of different asset classes is as under: Type of Asset Risk Profile are
Govt. & Govt. approved securities Low
Corporate Bonds Medium
Infrastructure as defined by IRDA Medium
Money Market and Other Liquid assets Very Low
Listed Equities High

Premium Allocation Charges
Premium allocation charge would be upto 0.5% of contribution depending on the size of contribution.

Fund Management Charges
Fund management charges vary depending on the fund size and the investment option chosen as indicated by the employer. These charges may be reviewed from time to time, up to a maximum of 2% of funds under management, with prior approval from IRDA.

Surrender Charges
In case the policyholder wants to terminate/surrender the policy, an exit fee is applicable depending upon the duration of the fund. In case a policy is terminated within 1 year, the company will charge 2% of fund value as surrender charge while the charge would be 1% of the fund value if the policy is terminated within 2 years. No exit charge will be applied if the termination occurs after 2 years.

Switching Charges
Kotak Life Insurance’s KSGP doesn’t levy any fee for switching between fund options. Thus your employees have the ability to reallocate their portfolios an unlimited number of times without incurring additional charges.

Non-forfeiture Benefits
If the employer/trustees stop paying the contributions, the existing monyies will continue to remain invested in the respective funds. The usual fund management charges will continue to be deducted. If any member retires/dies/withdraws, the cash value of the units held on his behalf will become payable in the manner provided for in the rules of the scheme.

The employer may pay the current as well as the arrears of contributions at any time. The moneys paid will be applied to purchase units in the funds chosen by the employer/trustees at the NAVs as per the scheme rules. No handling charges will apply.

Termination of Policy
The policy and/or the benefit in respect of any member can be terminated at the sole discretion of the company, if the value of the units is not sufficient to meet any charges, taxes or expenses, or if it is found that the member data provided was inaccurate or there was any material suppression of member data within the provisions of Section 45 of Insurance Act, 1938.

Free Look Period
The policyholder is offered 15 days free look period from the date of receipt of the policy.
The premium paid in Unit Linked Life Insurance policies are subject to investment risk associated with capital markets and the NAVs of the units may go up or down based on the performance of the fund and factors influencing the capital market and insured is responsible for his/ her decisions.
Please know the associated risks and the applicable charges, from your insurance agent or the intermediary or policy document of the insurer.

The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans or their future prospects and returns. The past performance of
other plans of the Company is not necessarily indicative of the future performance of any of these funds.

All benefits payable under the Policy are subject to the tax laws and other financial enactments, in force from time to time. If currently you do not have a Group Superannuation plan, you can start one today with Kotak Life Insurance! If you have an existing Group Superannuation plan you can transfer your fund to Kotak Life Insurance. We will help you with all the necessary paperwork and guide you through the process to make it hassle-free.