In today’s time when the prospect of out-living retirement savings is larger than ever, few employees take the time to plan their long-term financial goals or have the discipline to systematically save for their retirement years. As an employer of choice, you can help your employees tremendously by assisting in their retirement planning and in turn increase employee retention. The solution lies in the 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 of the 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?
You know that your employees are your most valuable assets. By helping to provide for retirement, you help increase employee retention and motivation. Moreover:

• According to 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.

How do I know if my company is eligible for KSGP?

• 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:

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:

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 monies 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.

Insurance Ombudsman:
The company shall endeavour to promptly and effectively address Policyholder’s grievances. However, in case the Policyholder may not be satisfied with the response of the company, he/she may also approach the Insurance Ombudsman located in his/her region. Details of the offices of the Ombudsman across the country are made available on the website of the company at www.kotaklifeinsurance.com and will also be made available to the Policyholder on request.

Risk Factors:

• Unit Linked Life Insurance products are different from traditional insurance products and are subject to risk factors.
• 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.
• Kotak Mahindra Old Mutual Life Insurance Ltd. Is only the name of the company and Kotak Superannuation Grouplan is only the name of the unit linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns.
• 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, 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.

Kotak Life assures you of a cost effective fund management for you and your employees’ benefit in a transparent and simplistic manner without any hidden costs!