In an exclusive interview to The Financial Express, UTI executive director BG Daga, executive director, said that the new fund was being launched with the primary objective of providing steady income to old aged employees of different companies and organisations who are opting for VRS. Under this scheme, two alternatives would be offered to investors.

One is the monthly payment scheme for those employees who will not be able to find further employment after VRS. The second alternative is the growth scheme which is targeted at employees who would be able to get further employment after VRS. Giving further details of the proposed scheme, Daga revealed that in the growth option, after three years, investors could exercise monthly withdrawal alternative (MWA), while in monthly payment option,investors can get monthly income. After 6 months of investment they can repurchase units of the scheme Regarding the investment pattern of the fund, Daga informed that majority amount of the fund would be invested in debt market while remaining portion would be invested in equity market. Under monthly payment option, the investment would be made in the ratio of 80:20 respectively. In growth option this ratio will be 70:30.

UTI will change the proportion in case of switchover by the investors. Daga said UTI has already approached some companies and organisations which have made their plans for VRS known. Regarding redesigning of its Grihlaxmi Plan, Daga said two options of income would be given to adult female investors. One is the growth option, under which dividend would be paid on yearly basis with reinvestment facilities while the second one is the festival option, under which dividend income will be paid on particular occasions.

In the existing scheme,dividend is declared once in a year. Under the redesigned scheme, UTI will also issue predenominated certificates of Rs 1100, Rs 2100 and Rs 5100 to a person who wants to give units of the scheme, as a gift to female investors. Daga added that UTI would also provide folio facilities under the new scheme.