In an Exposure Draft on Pension Products published yesterday, IRDA has relaxed its earlier requirement that all pension products should ensure an accumulation at a rate of 4.5% which was also indexed to the Reverse Repo Rate of the RBI. This has now been relaxed citing the uncertainty in investment returns.
Now the requirement is that an assured benefit in absolute terms should be specified at the time of sale, which would be payable at the vesting date. Alternatively a guaranteed return of premiums or a guaranteed annuity on vesting date could be mentioned.
Will this ease the pressure on LIC Pension funds which were pilloried due to notional loss? Only subsequent reporting will help us know. Will this stimulate other insurers to launch new pension products? Let's hope so.
Where is PFRDA in all this?
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