HDFC AMC has launched its mutual fund linked retirement plan (MFLRP) called HDFC Retirement Savings Fund. The NFO is currently open for subscription and closes on January 19.
HDFC Retirement Savings Fund is an open ended scheme and has four investment options: equity plan, hybrid-equity plan, hybrid-debt plan and income plan. According to the offer document, the equity plan will invest a minimum of 80% of the scheme corpus in equity and a maximum of 20% in debt while the hybrid-equity plan will allocate a minimum of 60% in equity and maximum of 40% in debt. The hybrid-debt plan will invest a minimum of 70% in debt and a maximum of 30% in equity while the income plan will invest the entire corpus in debt and money market instruments.
After attaining 58 years of age (subject to completion of the lock-in period), investors can redeem the entire corpus lump sum or switch the accumulated corpus within the three other plans of the scheme or any other open-ended schemes of HDFC Mutual Fund.
In recent years, only Reliance Mutual Fund had got CBDT approval to launch a retirement fund. Franklin Templeton (Templeton India Pension) and UTI (UTI Retirement Benefit Pension) have pension schemes which were approved long ago.
Sensing a big opportunity in the retirement space, fund houses are making a beeline for launching retirement products by filing offer documents with SEBI. Axis, Canara Robeco, DHFL Pramerica and SBI have already filed draft offer documents with SEBI and are awaiting approval from CBDT. Other fund houses too are expecting to get CBDT nod soon.
Distributors say that the existing retirement funds have received a mixed response from investors and more retirement products will ensure that investors get more choice.
