Pension Plan Woes

POSTED BY Sharad ON July 16, 2013 8:33 am COMMENTS (2)

I work in the private sector, in 2010 I bought a ULIP pension plan thinking I am doing a good thing for myself, as I was 27 at that time & also help me in my tax planning.

I realised my folly soon after. I had invested in HDFC pension Super that is connected to the pension II range of funds (Getting sold on seeing returns of the Pension I returns). After all the charges (premium allocation, annual maintenance, AMC etc) I have actually grown poorer by around 15% if I factor in inflation adjustment, opportunity cost I will probably get depressed :/The policy has a surrender charge till 5 years, after which it is zero, it also has premium allocation charges that are very high in the initial 3 years later on near 1%

My Dilemma is

Should I remain invested, perhaps Pension funds take some time to start giving returns?

Should I just cut my losses and run?

or Should I wait for the surrender charge to become zero and then exit?I’m tempted to cut my losses and exit straight away; but cringe at the further loss of my money…Any advice?

2 replies on this article “Pension Plan Woes”

  1. Dear Sharad, interestingly there is more shock to you in store. As & when you ‘ll surrender your pension plan, the surrender amount ‘ll be taxable in the year of receipt. 🙂

    My personal take ‘ll be to surrender it now & invest in plain investment product.



  2. Mohit Pandey says:


    If you want good pension plan then go for Templeton India Pension Plan (Mutual Fund) and invest in PPF. You can also invest in Mutual Funds but before doing so learn about MFs.

    Surrender the ULIP after lock-in period and purchase one pure term insurance.

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