New Delhi, June 11: Unit Trust of India is exploring possibilities of enlarging its unit linked insurance plan (Ulip) scheme for offering pension facilities while planning to introduce more such schemes once government comes up with the final guidelines for the sector.

“We are in talks with the Insurance Regulatory and Development Authority (Irda) for pension schemes. We are planning to enlarge the Ulip scheme to offer pension benefits,” a top UTI official said here. The move comes after the insurance regulator favoured entry of mutual funds along with life insurance companies for boosting the pension sector. Irda is expected to submit the final draft on pension reforms to the ministry of finance by July end or latest by October 2001. UTI chairman PS Subramanyam met Irda chairman N Rangachary recently to seek clarification about extending the ulip scheme to offer more facilities to pensioners.

Ulip, which had mopped up about Rs 4,500 crore till April 2001 is a multi-benefit scheme which combines the basic benefit of life insurance with good returns, tax benefits and accident insurance cover. Apart from modifying the Ulip scheme, the UTI official said the fund is planning more schemes specifically for pension sector once Irda comes out the guidelines.

Irda sources said UTI would have to abide by the new investment norms and change its portfolio holding in Ulip according to the prudential investment norms, which allow a maximum 25 per cent investment in equities.
Irda sources said UTI would have to abide by the new investment norms and change its portfolio holding of Ulip in accordance to the prudential investment norms, which allow a maximum 25 per cent investment in equities.

Pension funds are required to invest 40 per cent in government and other approved debt instrument (with a minimum 20 per cent in government securities) and the remaining 60 per cent in approved investments including ‘AAA’ rated debentures and equities.

-- PTI