Escorts Mf Plans New Pension Scheme

Escorts Mutual Fund is planning a pension fund with features such as life-long hospitalisation and no-load benefits. The scheme will offer a twin income and growth option to unitholders.

The asset management company would also be guaranteeing returns during the first year under the income option, said S Kannan, vice-president and head, Escorts Asset Management.

The company will shortly be approaching the Central Board of Direct Taxes (CBDT) for approval, he added.

Escorts is the fourth private sector mutual fund to come out with a pension fund, the others being Kothari Pioneer Mutual Fund, Tata Mutual Fund and IDBI Mutual Fund.

However, the last three are yet to receive the necessary clearances from the Central Board of Direct Taxes.

We are offering benefits like life-long hospitalisation during the pension period to the unitholder as well as an income option for the risk-averse unitholder. Besides there is the growth plan. The corpus will, however, be different under these two options. The features, we believe, are unique to our scheme, Kannan said.

Under the income option, Escorts will be guaranteeing returns during the first year to make it attractive. Once the unitholder starts receiving pension, he will receive an assured fixed income, he said.

Escorts mutual fund is now guaranteeing returns for the first year in its close-ended income scheme, Escorts Income Bond. We dont want to bother the unitholder, who will be a pensioner, with an exit load. Hence ours will be a truly no-load fund, Kannan said. Escorts will, however, keep the option of charging a management fee (maximum 1 per cent), open, he said.