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ON “Retire Rich Retire Young” AT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF REQUIRMENT FOR THE
ON “Retire Rich Retire Young” AT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF REQUIRMENT FOR THE
ON “Retire Rich Retire Young” AT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF REQUIRMENT FOR THE
ON “Retire Rich Retire Young” AT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF REQUIRMENT FOR THE
ON “Retire Rich Retire Young” AT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF REQUIRMENT FOR THE

ON

“Retire Rich Retire Young” AT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF REQUIRMENT FOR THE DEGREEOF
“Retire Rich Retire Young”
AT
SUBMITTED TOWARDS THE PARTIAL FULFILLMENT
OF REQUIRMENT FOR THE DEGREEOF
BACHELOR OF BUSINESS ADMINISTRATION
SUBMITTED BY
CHIRAG GARG

SUBMITTED TO

MR.RAHUL TYAGI

PROJECT GUIDE

BBA (Vth SEM)

RELIANCE SECURITY

ROLL NO: 100241037

SESSION:2010-2013

CERTIFICATE BY THE ORGANITION

This is to certify that Mr. CHIRAG GARG pursuing BBA at SHARDA UNIVERSITY (SCHOOL OF BUSINESS STUDIES), Greater Noida has worked under my supervision and guidance on his dissertation assigned “FORWARD MARKETING COMMISSION” at “RELIANCE SECURITIES”, NEW DELHI from JUNE 4 th 2012 to AUGUST 2 nd 2012. To the best of my knowledge this is an original piece of work.

the best of my knowledge this is an original piece of work. Faculty Guide MR. RAHUL

Faculty Guide MR. RAHUL TYAGI MR. HARSH MOIHOTRA MR. PUSHPENDRA SINGH

DECLARATION

DECLARATION I hereby declare that this project report entitled “forward marketing commission”, submitted in the

I hereby declare that this project report entitled “forward marketing commission”, submitted in the partial fulfillment of the requirement of BBA degree course of the SHARDA UNIVERSITY, Greater Noida is based on primary & secondary data found by me in various departments, books, magazines and web sides & collected by me.

Place: GR. NOIDA

Date:20 th August.

Name of Student: CHIRAG GARG

Address: Greater Noida

ACKNOWLEDGEMENT

If words are considered to be sign of gratitude then let these words convey the very same.

CHIRAG GARG, BBA (Vth SEM) Enroll no.10SBSBBA233 ROLL NO. 100241037
CHIRAG GARG,
BBA (Vth SEM)
Enroll no.10SBSBBA233
ROLL NO. 100241037

I am highly indebted to “Reliance Money”, who has provided me with the necessary information and also for the support and her valuable suggestions and comments on bringing out this report in the best way possible.

I feel great pleasure to cordial thanks to all the members of management department who sincerely supported me with the valuable insights into the completion of this project and I am thankful to that power that always inspire me to take right step in the journey of success in my life.

Last but not least, I also thank all those people whom I met in industry during my internship and helped me to accomplish my assignments in the most efficient and effective manner.

Sharda University, Gr.Noida.

Batch 2010 -2013.

CONTENTS

Objective of the study Need of the study Introduction Six steps to retire rich The problem with a 401(k) & social security Personal view on Retire rich Retire young Indian pension system Structure of the Indian pension system Problems with provident funds Pension business in India Delhi govt. expands scope of widow pension plan Investment choices Company profile Swot analysis Conclusion Bibliography

Delhi govt. expands scope of widow pension plan Investment choices Company profile Swot analysis Conclusion Bibliography

OBJECTIVE OF THE STUDY

Cash flow is the most important work in the world of money. The second most important word is leverage. Leverage is the reason some people become rich and others do not become rich. The reason less that 5 percent of all Indians are rich is because only 5 percent know how to use the power of leverage.

only 5 percent know how to use the power of leverage. One of the recognized forms

One of the recognized forms of leverage is the leverage of borrowing money. Millions of people struggle financially because the power of debt leverage is used against them. Good debt makes you rich and bad debt makes you poor. We retired young and rich because we were deeply in debt, deeply in debt with good debt, debt that made us rich and financially free. We used the power of leverage, we did not abuse the power, nor do we live in fear of its power. Instead we respect the power of leverage and use it wisely and cautiously.

The most powerful form of leverage in the world, your mind, has the power to make you rich or make you poor.

Rich people use rich words and poor people use poor words. Our brain can be our most powerful asset or it can be our most powerful liability. The difference between rich people and poor people is that poor people say “I can’t afford it” more often that rich people. If you want to retire young and retire rich, you will need to use your brain in your favour, not against you.

Times of India magazine define rich as $1 million or more a year in income. The problem with having a job is that it gets in the way of getting rich. We retired young so that we would have time to become rich.

Most people have a plan to be poor. That is why so many people say, “When I retire, my income will go down.” In other words, they are saying, “I plan of working hard all my life and then I will become poorer after I retire.”

Millions of workers are now counting on their retirement plans, plans such as 401(k) and IRA. Employees are now responsible for their retirement. In the Industrial Age, it was the company or the government that would take care of your financial needs once your working days were over. There is one tragic flaw in these Information Age retirement plans. The flaw is that most of these plans are indexed to the stock market, and as you may have noticed, stock markets go up and stock markets go down.

have noticed, stock markets go up and stock markets go down. Planning to work hard all

Planning to work hard all your life is a poor plan. For many baby boomers, time, our most important asset, is running out.

In India less than 5 percent of the population is rich because 95 percent of the population may want to be rich but only 5 percent takes action.

NEED OF THE STUDY

Poor people use poor words and poor words create poor people. If you can change your words and your thoughts to those of the rich, retiring young and retiring rich will be easy.

The biggest challenge you have is to challenge your own self-doubt and your laziness. It is your self-doubt and your laziness that defines and limit who you are. If you want to change what you are, you must take on you self-doubt and you laziness. It is your self-doubt and laziness that keep you small. It is you self-doubt and laziness that deny you the life you want. There is no one in your way except you and your doubts about you. It is easy to stay the same. It is easy not to change. Most people choose to stay the same all their lives. If you will take on you self-doubt and your laziness, you will find the door to your freedom.

and your laziness, you will find the door to your freedom. I could let my self-doubt

I could let my self-doubt and laziness win or I could go on and change my perceptions about myself. It was time to move forward or to go backward.

Without the “why,” the “how” would have been impossible. It is the “why” that gives you the power to do the “how to.” The reason most people do not do what they can do is because they do no have a strong enough “why.” Once you find the” why,” it is easy to find you own “how to” to wealth. Instead of looking inside of themselves to find their own “why” they want to become rich, most people look for the easy road to wealth, and the problem with the easy road is that the easy road usually ends in a dead end.”

The three main assets that make people rich and allow them to retire young. The three assets are:

1. Real Estate

2. Paper assets

3. Businesses

INTRODUCTION

Early retirement is not such a bad idea, but only if it’s affordable. Today, people who begin this process feel confident that they can live out the rest of their lives comfortably. Still being young enough to enjoy what is earned is another good reason why someone might want to advance into retirement. Also, having good health is another popular reason why it is a good idea to retire early. After working hard, one should reward them self by enjoying what they have worked for. Either off benefits or money allocated throughout the working years, these retirees enjoy what they worked for. Not only do they feel relaxation and enjoyment, retiring early also gives them a sense of accomplishment. Purchasing previously desired land or traveling to a country never visited before are just some examples in which early retirees enjoy the money that was saved. Since the assets are all earned, spending this bonus makes one feel proud for what they worked for and that the working years didn’t seem like a waste. Something simple such as being young can make someone retire early. Retiring early just for being young also has their advantages. This way, the retiree can explore more areas and get to stay longer because they have more years to enjoy than an ordinary retiree. Also, when someone gets older their health slowly diminish and their ambition to go out and travel also vanishes.

and their ambition to go out and travel also vanishes. Finally, having good health while retired

Finally, having good health while retired pays off. One would tend to enjoy retirement more if their health were in decent shape. Irritating injuries and illnesses certainly keep the retiree limited while being retired. Ambition to travel and going out and doing things lowers when the health is low. Having bad health makes retirees not enjoy the full effect of retiring. One is supposed to enjoy what is earned and shouldn’t have any complications during retirement.

In essence, retiring young seems to be the way to go. If you have your health while you still have many years to enjoy it, and the ambition to follow through is there, why not do it? You can always come out of retirement.

SIX STEPS TO RETIRE RICH

1. Time is money

The most important key to retiring rich is to start saving as early as possible. Many workers, strapped for cash or eying a major purchase, tell themselves they can make up for lost time by making higher contributions in future years. Unfortunately, money doesn’t work that way. Thanks to the power of compound interest, cash invested today has a disproportional impact on your wealth level at retirement.

a disproportional impact on your wealth level at retirement. To put the matter into perspective, consider

To put the matter into perspective, consider two possible scenarios; both assume a retirement age of 65 and an annual compounded rate of return of 10%.

John is 40 years old and invests $20,000 a year for retirement. Charlotte is 21 years old and invests $5,000 a year for retirement. By the time each of these individuals retires, they will have invested $400,000 and $220,000 respectively. Yet, because of the power of compound interest, John would retire with half the money as Charlotte despite investing twice as much! (John would retire with $1.97 million, Charlotte with $3.26 million).

The moral of the story? Stop robbing your future to pay for today.

2. Max out the annual contribution limit on your IRA

When it comes to IRA contribution limits, Uncle Sam’s motto seems to be “use it or lose it”. Workers that haven’t made the maximum permissible contribution to their Traditional or Roth IRA by the cut-off date are flat out of luck unless they are in their mid-fifties and qualify for catch-up contributions.

3. Take full advantage of employer matching funds

Many companies will match up to fifty-percent of the contributions employees make to their401k and other retirement accounts. If you are fortunate enough to work for such a business (and millions of Indians are), take advantage to the fullest, If you don’t, you are literally walking away from free money.

you don’t, you are literally walking away from free money. Avoid IRA withdrawal fees 4. Don’t

Avoid IRA withdrawal fees

4. Don’t cash out of your retirement when you change jobs.

If you are anything like the average Indian worker, the odds are fairly substantial you are going to change jobs at some point during your career. When this occurs, the most foolish thing you could possibly do is to cash out of your retirement plan. Instead, roll over the proceeds into an IRA or your new employer’s 401k plan. In addition to avoiding the significant tax penalties, you will be able to keep your money working for you tax-free. Given enough time (you already saw the power a few decades can have on seemingly small amounts of money), this literally could mean the difference between vacationing in Tahiti and having to take a job at the Golden Arches to supplement your income.

5.

There are numerous ways to withdrawal money from your retirement account in the event of an emergency. Before you even think about doing so, make absolutely certain that you have done everything required to qualify - otherwise, you will get

a very unpleasant and expensive wake up call when you are hit with possibly thousands of Rupees in fees and penalties.

hit with possibly thousands of Rupees in fees and penalties. 6. Expand the Pie Don't just

6. Expand the Pie

Don't just cut expenses - find a way to make more money! By taking on side work or turning a hobby into a business enterprise, you can create additional streams of income to help fund your retirement. In many cases, this is an excellent alternative to cutting costs because it allows you to maintain your current standard of living while providing for your future.

THE PROBLEM WITH A 401(K) & SOCIAL SECURITY The Problem with a 401(k)

Although I recommend that everyone have and maximize contributions to a 401(k), if they qualify for one, there is one major flaw I see in it. The flaw is that although you save your money in it and it hopefully grows free of the 20 percent capital gains tax when you withdraw it at retirement time, you are taxed at the 50 percent tax rate off earned income. Even though you believe you are investing in portfolio or 20 percent money, when you cash in, you are still taxed at earned income rates. That means you work all your life for 50 percent money, and when you retire you are still taxed at the 50 percent rate.

when you retire you are still taxed at the 50 percent rate. The second problem with

The second problem with a 401(k) is that it only works for people who are planning on being poor. If your income remains high after you retire, you continue to pay higher taxes on your retirement money because your income went up, not down.

The Problem with Social Security

The problem with Social Security is that it only works for people who want to be poor. If after you retire and you find that Social Security is not enough for you to live on, and you go to work for earned income, the government will begin reducing your Social Security payments. In other words, the only way to receive a full payment is to choose to be poor, in most cases.

PERSONAL VIEW ON RETIRE RICH RETIRE YOUNG

A new study suggests nearly half of young Indians want to retire early, but few have begun saving enough for it. Report found that 41 per cent of those surveyed aged 18 to 34 expect to stop working before they hit 60 years old. About 57 per cent plan on retiring by the time they’re 69. These expectations are unrealistic considering 27 per cent of respondents have not tucked away any money for retirement.

respondents have not tucked away any money for retirement. Among those who had begun saving, 52

Among those who had begun saving, 52 per cent had put their money into a Registered Retirement Savings Plan, while 36 per cent used a Tax-Free Savings Account. The study did not look at how much money was saved in those accounts. “What we’ve noticed is that (young adults) are not doing a lot of things that are absolutely necessary for them to start preparing for their retirement years”. Young people might not realize that the earlier they begin investing for the future, the less they’ll need to save once they’re nearing retirement. “There is a view that retirement is far off in the distance and there are more pressing other matters they have to deal with (like) finishing school, paying off student debt, buying a home, dealing with a mortgage and perhaps a young family”.

There are many other priorities for a young adult where they really focus on, rather than focusing on things that are going to be 20 years down the road. But the reality is members of Generation Y should be more worried about their retirement futures than their parents in the Baby Boomer generation. In the past, retirees only needed enough money to live for a few years after they stopped working. Now, as people continue to live into their 80, 90s and beyond, the young generation need to make sure they have enough money for these extra years.

Employers who offer defined-benefit pension plans which guarantee a certain level of retirement pay out are also more rare nowadays, forcing people to rely more on their individual investments in retirement. The vast majority of young people surveyed agreed that retirement planning was relevant (75 per cent) and important (82 per cent). Still, only 23 per cent have spoken with a financial planner about their futures.

have spoken with a financial planner about their futures. The “Broadening the Approach to Preparing for

The “Broadening the Approach to Preparing for Retirement” report used data from a survey of a representative sample of 1,00 Indians aged 18 and older. It was conducted only in Greater Noida.

INDIAN PENSION SYSTEM

The debate on the pension system reforms is intensifying in India. The on-going financial sector reforms have made significant progress in the spheres of banking, capital and currency markets and now provides an opportunity to revamp the hitherto untouched sectors like insurance and pension. While insurance sector reform is already underway, the effect of which to a certain extent is expected to percolate to the private pension market a comprehensive policy for pension system restructuring is yet to be undertaken.

for pension system restructuring is yet to be undertaken. A variety of problems plague the pension

A variety of problems plague the pension system in India. The gradual collapse of the traditional old age support mechanisms and the rise in elderly population highlights the need for strengthening the formal channels of retirement savings. The imperative, more proximate reasons for pension reform are also well known - skewed coverage of the existing benefit schemes favouring organized workforce while informal employment is on the rise, worsening financial situation of government pension schemes against a background of rising system expenditure, unfair treatment of private sector workers vis-à-vis public sector employees, an under developed private annuity market, and finally the need to increase the domestic rate of savings through higher contractual savings.

Major retirement savings schemes like provident and pension funds predominantly cover workers in the organized sector, constituting only about 10 per cent of the aggregate workforce. The majority of workers, around 90 per cent of the working population are engaged in the unorganized sector and have no access to any formal system of old age economic security. This skewed coverage is further shrinking as informal workforce is growing while the size of formal workforce has remained more or less stagnant.

Additional impetus for pension reform comes from the fragmented nature of the existing benefit schemes. In spite of its limited scope and size, the Indian pension system in its current form, can at best be described as an extremely complicated and fractured one inducing distortion in the labour market. A large number of occupation based retirement schemes with wide diversity in plan characteristics and benefit provisions are in existence, and have created a wedge of disparity between public and private sector workers. While private sector workers are aggrieved with low returns from their benefit schemes, public employees are privileged with generous pension provisions.

employees are privileged with generous pension provisions. In recent years, there have been attempts to address

In recent years, there have been attempts to address these problems. These efforts, however, have largely been piecemeal. The diverse and often conflicting set of problems faced by the Indian pension system requires a more serious and coherent approach. For example, on one hand, there is an urgent need to contain the escalating expenditure on public pension programs while there is also an urgency to extend the coverage to the unorganized sector. The government initiatives in recent years like advancement of retirement age for its employees, partial conversion of provident funds into pension schemes for private workers and introduction of new means-tested social assistance schemes for the poor have met with limited success, further underlining the need for an early and lasting reform of the current system. The remainder of the text is organized as follows. Section 2 reviews the structure of the current pension system. In section 3, the motivations for reforming the current system are discussed. The recent institutional developments pertaining to the pension sector is described in section 4. Next, in section 5, the study assesses the major issues that need to be addressed for a comprehensive reform of the Indian pension system. Section 6 provides concluding comments including a summary of the discussion.

STRUCTURE OF THE PENSION SYSTEM

India, like most other developing countries, does not have a universal social security system to protect the elderly against economic deprivation. Perhaps, persistently high rates of poverty and unemployment act as a deterrent to institute a pay-roll tax financed state pension arrangement for each and every citizen attaining old age. Instead, India has adopted a pension policy that largely hinges on financing through employer and employee participation. This has however restricted the coverage to the organized sector workers - denying the vast majority of the workforce in the unorganized sector access to formal channels of old age economic support. Notwithstanding the limited size and scope, India has a long tradition of pension and other forms of formal old age income support system. The history of the Indian pension system dates back to the colonial period of British-India. The Royal Commission on Civil Establishments, in 1881, first awarded pension benefits to the government employees. The Government of India Acts of 1919 and 1935 made further provisions. These schemes were later consolidated and expanded to provide retirement benefits to the entire public sector working population. Post-independence, several provident funds were set up to extend coverage among the private sector workers.

set up to extend coverage among the private sector workers. Today, major retirement schemes in India

Today, major retirement schemes in India include provident fund, gratuity and pension schemes. The first two schemes provide lump sum retirement benefit while the last one makes payment in the form of monthly annuity. These schemes are characterized by the following common features i.e. they are mandatory, occupation based, earnings related, and have embedded insurance cover against disability and death. Table 1 elaborates salient features of the major provident fund and pension schemes.

The central government, states and union territories provide pension benefits to the public employees. In addition, a large number of public and local bodies and autonomous institutions run their own pension schemes guaranteed by the government. The central government alone administers separate pension programs for civil employees, defence staff and workers in railways, post, and telecommunications departments. These benefit programs are typically run on a pay-as-you-go, defined-benefit basis. The schemes are non-contributory i.e. the workers do not contribute during their working lives. Instead, they forego the employer’s contribution into their provident fund account. The entire pension expenditure is charged in the annual revenue expenditure account of the government. Full superannuation benefit is a monthly pension fixed at fifty per cent of the average monthly earnings during the last year of service. The pension is indexed to provide a real annuity to the retirees. Public employees, in addition to their pension benefits are also covered under the General Provident Fund (GPF) scheme. The GPF is a non-contributory program where only workers themselves contribute a minimum of six percent of their monthly earnings. The accumulation under the GPF account is returned to the worker in lump sum at the time of retirement. Private sector workers are less fortunate and until recently had access only to a provident fund system for their old age income security. Provident Fund is a defined-contribution, fully funded benefit program providing lump sum benefit at the time of retirement. The provident fund system, consisting of the Employees’ Provident Fund (EPF) and a number of smaller provident funds is the largest benefit program operating in India.3 Together; the schemes provide retirement benefits to about 10 percent of the labour force. Workers (and private employers) contribute between 10 - 12 percent of monthly earnings, to be returned to the worker in a lump sum payment at retirement, including accumulated interest at a rate currently set at 11 percent. In 1995, the government partially converted the EPF scheme and introduced the Employees’ Pension Scheme (EPS).

percent. In 1995, the government partially converted the EPF scheme and introduced the Employees’ Pension Scheme

In addition to the provident fund, workers in both public and private sectors receive a second tier of lump sum retirement benefit known as gratuity. It is paid to the workers who fulfil certain eligibility conditions like a minimum qualifying

service period of five years. It is equivalent to 15 days of final earnings for each

years of service completed subject to a maximum of gratuity is entirely borne by the employer.

Rs. 350,000. The cost of

is entirely borne by the employer. Rs. 350,000. The cost of These schemes are largely the

These schemes are largely the privilege of the organized sector workers. Workers in the unorganized and informal sectors4 have access only to a few voluntary schemes like Public Provident Fund and pension plans offered by the Life Insurance Corporation of India. Organized sector employees can also subscribe to these schemes to augment their retirement savings.

For people in the lower end of the economic strata, there are several central as well asstate government-run means-tested, targeted, social assistance programs and welfare funds. The criteria of eligibility varies, but generally the destitute, the poverty stricken and the infirm aged 60 years and above are provided pension at rates ranging between Rs. 30 and Rs. 100 per month. However, the combined coverage of these social assistance schemes is insignificant and covers anywhere between 5 and 10 per cent of the total elderly population. In an effort to widen the reach of the social safety net for the aged poor, the central government, in 1995, introduced a more comprehensive old age poverty alleviation program called the National Old Age Pension (NOAP) under the aegis of the National Social Assistance Programme (NSAP). The scheme aims to provide monthly pension to thirty per cent of the poorest elderly.

The formal old age income security system in India can thus be classified into three categories. The upper tier consists of statutory pension schemes and provident

funds for the organized sector employees; the middle tier is comprised voluntary retirement saving schemes for the self-employed and unorganized sector workers while the lower tier consist of targeted social assistance schemes and welfare funds for the poor.

social assistance schemes and welfare funds for the poor. PROBLEMS WITH PROVIDENT FUNDS The Indian provident

PROBLEMS WITH PROVIDENT FUNDS

The Indian provident fund system has many shortcomings - some of which are inherent to the schemes while others have emerged due to poor plan administration. According to Vittas and Skully (1991), in a provident fund system, the income replacement, investment and inflation risks are borne by the plan participants. According to the principles of social insurance, provident fund is not an ideal substitute for pension. The ILO (1997) argues that provident funds have serious limitations in alleviating old age poverty because it does not provide protection against the whole length of the contingency.

The experience of provident fund schemes in India also suggests some practical limitations of a pure provident fund arrangement. First, the inability to ensure that lump sum payments are used to provide old age protection is a serious draw back of the current system. Majority of the workers being low wage earners has little additional savings and much of the lump sum amount is spent in meeting essential needs after retirement. Second, the provision of liberal non-refundable withdrawal facility from provident funds to meet various contingencies during the employment period significantly reduces the quantum of benefit at retirement. For example, the EPFO distributed average terminal accumulations of less than Rs. 25,000 per member during 1997-98. In the same year, the EPFO allowed an average premature withdrawal of Rs. 17,000 per member (OASIS, 2000).

Low investment yields from provident funds, due to conservative investment norms, further complicate the problem.7 According to World Bank (1994a) estimates, the average real rate of return from the EPF scheme was below 1 per cent in the 1980s. The annual returns from EPF for more recent period are shown in Figure 2. The average annual real rate of return between 1985 and 1997 is only about 2.63 per cent. These returns are too low to generate a sizeable terminal accumulation of pension assets, and they further encourage premature withdrawal of funds allowed under certain defined circumstances as mentioned earlier

and they further encourage premature withdrawal of funds allowed under certain defined circumstances as mentioned earlier

PENSION BUSINESS IN INDIA

India has never had a pension system for the population across the country, as has been in existence in other parts of the world, even though we have had some schemes mainly directed at government employees.

had some schemes mainly directed at government employees. In other parts of the world pension reforms

In other parts of the world pension reforms have led to funding, not of the defined benefit (DB) kind but the defined contribution (DC) kind. All over the world there has been a tendency to switch over from DB to DC and this is not because DB is bad. The forces of globalisation have caused a high flux of employees from one organisation to another, from one country to another, making it almost impossible to run a DB system. Other reasons include the weakening of trade unions across the globe and the decreasing rate of interest which led to employers finding it increasingly difficult to sustain the funding required to build up the benefits on the DB system. However, this has also become the exit route for some employers to get out the liability of pensions.

Some of these factors are playing their role in India too. Under the DB system the pension was defined and arrangements were made to make sure assets were available, whether the pension was funded or not. The DC system defines the contribution but one still needs to ensure that the accumulated contribution will meet the desired amount of pension one will get. That’s where the role of actuaries comes in. India does not have the required regulatory regime, particularly one that applies across the field. We still require a holistic approach to regulating pension providers.

The time has come now to set up regulatory measures for pensions. There are a number of models to look at, such as that of the UK and Australia. While we need not copy them, we do not have to invent the wheel all over again either. The key

to any pension system is the financial regulatory mechanism and that is monitored through the actuarial system. The role of the actuary in pension provision is important and must be addressed along with many other issues.

system. The role of the actuary in pension provision is important and must be addressed along

DELHI GOVT. EXPANDS SCOPE OF WIDOW PENSION PLAN

NEW DELHI: Divorced, separated, abandoned and destitute women in the city will get a monthly pension of Rs 1,000 with Delhi Government today deciding to extend the benefit to them which was till now available only to economically deprived widows. "It has been decided to expand the eligibility conditions under widow pension scheme to include these women," Chief Minister Sheila Dikshit told reporters after a Cabinet meeting.

Sheila Dikshit told reporters after a Cabinet meeting. Dikshit said the divorced, destitute, separated and

Dikshit said the divorced, destitute, separated and abandoned women will get monthly pension of Rs 1,000 which will be remitted to the bank account of the beneficiary on a quarterly basis through electronic clearance system. Officials said the beneficiary should be a resident of Delhi for more than five years and her age should be between 18 to 60 years.

Those getting any pension from government, corporation or public agency will not be eligible to get the pension. Women receiving any alimony or maintenance allowance as per judicial orders will not also be eligible for the benefit. Dikshit said the revised scheme would provide an extended social security to women in distress.

INVESTMENT CHOICES

You should know that a vast array of investment products exists - including stocks and stock mutual funds, corporate and municipal bonds, bond mutual funds, lifecycle funds exchange-traded funds, money market funds, and U.S. Treasury securities. For many financial goals, investing in a mix of stocks, bonds, and cash can be a good strategy. Let's take a closer look at the characteristics of the three major asset categories.

at the characteristics of the three major asset categories. Stocks - Stocks have historically had the

Stocks - Stocks have historically had the greatest risk and highest returns among the three major asset categories. As an asset category, stocks are a portfolio's "heavy hitter," offering the greatest potential for growth. Stocks hit home runs, but also strike out. The volatility of stocks makes them a very risky investment in the short term. Large company stocks as a group, for example, have lost money on average about one out of every three years. And sometimes the losses have been quite dramatic. But investors that have been willing to ride out the volatile returns of stocks over long periods of time generally have been rewarded with strong positive returns.

Bonds - Bonds are generally less volatile than stocks but offer more modest returns. As a result, an investor approaching a financial goal might increase his or her bond holdings relative to his or her stock holdings because the reduced risk of holding more bonds would be attractive to the investor despite their lower potential for growth. You should keep in mind that certain categories of bonds offer high returns similar to stocks. But these bonds, known as high-yield or junk bonds, also carry higher risk.

Cash - Cash and cash equivalents - such as savings deposits, certificates of deposit, treasury bills, money market deposit accounts, and money market funds - are the safest investments, but offer the lowest return of the three major assets categories. The chances of losing money on an investment in this asset category are generally extremely low. The federal government guarantees many investments in cash equivalents. Investment losses in non-guaranteed cash equivalents do occur, but infrequently. The principal concern for investors investing in cash equivalents is inflation risk. This is the risk that inflation will outpace and erode investment returns over time.

will outpace and erode investment returns over time. Stocks, bonds, and cash are the most common

Stocks, bonds, and cash are the most common asset categories. These are the asset categories you would likely choose from when investing in a retirement savings program or a college savings plan. But other asset categories - including real estate, precious metals and other commodities, and private equity - also exist, and some investors may include these asset categories within a portfolio. Investments in these asset categories typically have category-specific risks. Before you make any investment, you should understand the risks of the investment and make sure the risks are appropriate for you.

COMPANY PROFILE RELIANCE SECURITIES LIMITED

Address: 11th floor, R - Tech Park IT park, Western Express Highway, Goregaon (East), Mumbai - 400063

Telephone: 91 22 30591234/1666

Email: customer.support@resec.co.in

Registration Number: NSE - INB/INF231234833; BSE - INB/INF011234839

Fax: 91 22 30591555 Website: www.rsec.co.in
Fax: 91 22 30591555
Website: www.rsec.co.in

About the Company

Reliance Securities Ltd (Reliance Securities), a Reliance Capital company is one of the leading brokerage houses and distribution arms of the Reliance Anil Dhirubhai Ambani Group (RDAG). The firm was established in 2005 and offers comprehensive services such as trading in equity, derivatives, investment banking, portfolio management services (PMS), wealth management services (WMS), research & distribution of financial products such as mutual funds, insurance and IPO’s among others. Reliance Securities is present in the currency and debt market segment as well.

Market & Network

Reliance Securities acquired memberships of the premium stock exchanges in India, namely BSE and NSE in 2005 and 2006 respectively. It offers trading facilities in the cash and derivatives market segment of both NSE and BSE. The company

provides trading in the debt market segment as well. It also acts as a DP with CDSL. Reliance Securities’ website – www.rsec.co.in also facilitates trading in commodities for its partner company, Reliance Commodities Ltd which holds memberships in NCDEX, MCX and NMCE.

Reliance Securities is headquartered in Mumbai with operations across all major Indian cities. Majority of the company’s terminals are located in Mumbai. It has a vast network spread across 3,393 cities, with 116 offices, and 2,822 equity broking terminals allocated to 2,943 registered sub-brokers.

broking terminals allocated to 2,943 registered sub-brokers. As on Dec 31, 2009, Reliance Securities had 73

As on Dec 31, 2009, Reliance Securities had 73 NEAT terminals, 40 BOLT terminals and 2,709 CTCL licenses. During the same period, the company added 1,84,550 client accounts of which 1,82,720 were e-broking accounts.

Products and Services

Trading: Reliance Securities facilitates trading activities in all the major market segments including, cash, derivatives, debt and currency futures.

The company offers online trading facility through its website, www.rsec.co.in. Reliance Securities has recently migrated all its customers to its new trading platform, Insta Plus and Insta Express.

Apart from internet trading, customers are also provided with the option of trading through the Call & Trade facility and through RSec.mobi, a personal mobile phone service. Clients can place and track their orders on BSE and NSE on a real time basis with access to RSec.mobi. This facility is available to Reliance

Securities trading account holders across all mobile platforms independent of device, operator and the underlying carrier technology.

Investment Banking: Reliance Securities also offers Investment Banking services.

Reliance Securities also offers Investment Banking services. Distribution of Financial Products: Reliance Securities is

Distribution of Financial Products: Reliance Securities is involved in the distribution of financial products such as mutual funds, insurance and IPO’s.

DEMAT Services: The company offers DEMAT services through Reliance Capital and is a registered member with NSDL and CDSL.

PMS: Reliance Securities is a SEBI registered portfolio manager and offers customised services to their client which is designed to meet their investment objectives.

These services cover all administrative aspects while providing periodic reporting to clients.

WMS: The Company makes available Wealth Management Solutions to its customers

Research: Reliance Securities offers research based services to its clients. Its research wing encompasses 100 companies across 20 sectors. This division offers

complete research solutions on IPOs, mutual funds, economic research and other special reports and newsletters.

Insurance: Reliance Securities also provides a range of insurance products including life insurance and general insurance through Reliance Composite Insurance Broking

insurance through Reliance Composite Insurance Broking NRI Services: NRI clients can place orders using the new

NRI Services: NRI clients can place orders using the new their trading platform such as Insta plus and Insta Express. NRI’s can execute their securities transactions under the provisions of the RBI guidelines for NRI Portfolio Investment Scheme (PIS).

Future Plans

Reliance Securities plans for CY10 include offering new products to its clients. In the near future, the company also plans to raise additional capital through the private placement route. During the above period, it plans to add 100 terminals, open 20 new branches apart from adding 100,000 new E-broking accounts. Additionally, it intends to recruit 250 more employees.

R-Tech IT Park, Reliance Securities Limited (Corporate Office)
R-Tech IT Park, Reliance Securities Limited (Corporate Office)

R-Tech IT Park, Reliance Securities Limited (Corporate Office)

SWOT ANALYSIS

Strength

1. Innovation range of financial services 2. Largest E-broking house in the country 3. Has
1.
Innovation range of financial services
2.
Largest E-broking house in the country
3.
Has over 6000 outlets in India and over 3.5million clients
4.
Ranks among the top 3 private sector in financial services and banking
groups , in terms of net worth
Weakness
1.
Penetration limited to urban areas
Opportunity
1.
Growing rural market
2.
Earning urban youth
3.
Educating people about the benefits of investments to increase target
audience

Threats

1. Stringent economic measures by government and RBI

2. Entry of foreign firm in Indian market

CONCLUSION

Retire rich retire young is better than retire at old age. The retiree can explore more areas and get to stay longer because they have more years to enjoy than an ordinary retiree. Ambition to travel and going out and doing things lowers when the health is low, having bad health makes retirees not enjoy the full effect of retiring.

health makes retirees not enjoy the full effect of retiring. Reliance Security provides good returns in

Reliance Security provides good returns in investment. It is the Largest E-broking house in the country. It Ranks among the top 3 private sector in financial services and banking groups, in terms of net worth, so any one wants to plan his retirement can invest his money in Reliance Security. Indian pension system is passing through a crisis of confidence. The economic, demographic and labor market trends of the current system are moving in troublesome directions.

BIBLIOGRAPHY

1.

2.

www.google.com

www.wikipedia.com

3.

www.rsec.co.in

BIBLIOGRAPHY 1. 2. www.google.com www.wikipedia.com 3. www.rsec.co.in