A pension plan enables the insured lead a normal life after retirement. Both the employee and employer make a monthly contribution which is professionally invested. This plan is carefully designed to provide security and good growth prospects and it is very flexible and tax efficient for taxpayers. The plan is registered with the income tax and therefore members will automatically enjoy the tax advantages of the plan. The pension fund builds over time into a big fund from which, the employee will be paid an attractive retirement benefit on attainment of retirement age.
On retirement one can purchase an annuity. An annuity is the after-retirement income you receive and is a series of periodic payments payable throughout your life. The accumulated fund at retirement is used to purchase the annuity.
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