Choices are plenty when it comes to Retirement Planning using equity.
The New Pension Scheme comes with a cap of maximum 50% in equities. The management expenses for equity schemes are high compared to debt schemes.NPS being a huge kitty comes with approximately 1/6 of charges compared to normal equity schemes.
There are specified pension plans like UTI Retirement Benefit Plan and Templeton India Pension Plan which are dedicated pension plans.
Beyond these there are a plethora of equity schemes that allows long term investment like the NPS. But what makes NPS superior is the tax saving aspects and its cost advantage.Balanced schemes are suitable in the long run when you plan for a lifetime accumulation.
The NPS offered by the employer is Tier-I Account where premature closing is not allowed. Given the socio-economic background of the working class, this is a good choice.
Equity gives better returns in the long term compared to debt; But the higher management cost takes away the gains and the external environment could be unfavorable when you want to exit. So one needs to be a little alert to switch to safer alternatives when the Retirement approaches closer.
PFRDA regulates the Pension products market where as the SEBI regulates the Mutual Fund market and the insurance segment is regulated by the IRDA. The complex web of regulations and regulatory bodies strive to keep up best standards.
Happy Investing,
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