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Union AMC’s Union Retirement Fund NFO Opens On Sep 1: All You Need To Know

The Union Asset Management Company Private Limited has launched an open-ended Union Retirement Fund, with a lock-in of five years or till the retirement age, whichever comes first. 

The new fund offer (NFO) will open on September 1, 2022, and close on September 15, 2022. The minimum investment is Rs. 1,000 and thereafter, in multiples of Rs. 1.

The fund hopes the new retirement scheme will benefit employees facing various layoff risks due to changes in the economy or those planning to drop out permanently to pursue their own dreams or career. 

Moreover, it believes the rise in the national life expectancy to nearly 70 years makes it indispensable for people to have a retirement policy to capitalize on freedom and opportunities post their retirement age.

The fund claims its equity investment plan is designed to help customers achieve their life goals. For instance, it has a compulsory lock-in of five years or till the retirement age, whichever is earlier. 

Commenting on the scheme at the launch event on Monday, Union AMC CEO G. Pradeepkumar said, “It (NFO) is a bugle that calls for serious introspection amongst all stakeholders to dovetail aspiration planning with financial planning.” 

Pradeepkumar stressed that “Renewment planning is how one meticulously plans for freedom in a disciplined manner. It goes beyond just planning for the pursuit or accumulation of wealth.” 

The scheme’s allotment date is September 22, 2022. It will re-open for ongoing sale and repurchase on September 29, 2022. 

The Union Retirement Fund is benchmarked against S&P BSE 500 Index (TRI). 

According to the fund, the scheme’s main objective is to generate long-term capital gains by investing in equity, equity-related securities and debt instruments, based on its asset allocation strategy.

Retirement Planning Is Critical

The topic of retirement has been gaining increased attention both from the public and the government in recent times as part of efforts to ensure better facilities and welfare for the country’s growing number of pensioners. Although the government announces policies from time to time for their benefit, the private sector is also coming up with products focusing on this specific age group.

Retirement Instruments

Those planning for retirement can explore a number of financial instruments, such as debt options, equities, and the national pension scheme (NPS), to help build their retirement corpus and live a dignified retired life with financial freedom.

Among the debt options, the Employees’ Provident Fund (EPF) tops the list, with a return of 8.10 per cent per annum, followed by Public Provident Fund (PPF) at 7.10 per cent annually. Both options qualify for tax deductions up to Rs 1.5 lakh under Section 80 C of the Income Tax Act, 1961. 

Investing in stocks and equity-related instruments like mutual funds could provide significant returns. They provide the highest returns compared to other financial instruments. Besides, the central government’s national pension scheme (NPS) offers a combination of debt and equity benefits, depending on one’s choice and age. It also provides tax deduction up to Rs 1.5 lakh under Section 80C and an additional deduction of Rs. 50,000 under Section 80CCD (1b).