The Nationwide Pension Scheme (NPS) is a social safety initiative by the Central Authorities and is open to workers from the general public, non-public and even the unorganised sectors. NPS encourages individuals to spend money on a pension account at common intervals through the course of their employment. After retirement, the subscribers can take out a sure share of the corpus. NPS is regulated by the Pension Fund Regulatory and Improvement Authority (PFRDA).
The variety of subscribers in numerous pension schemes rose 24 per cent to 4.63 crore on the finish of September 2021, the pension fund regulator stated in a press release,
Just lately, there have been a number of modifications to NPS guidelines. Have a look:
1) Entry age elevated
The pension fund has revised the rules on entry into NPS to 70 years. Earlier the entry age was 65 years. The entry age for NPS has been revised to 18-70 years from 18-65 years. Any Indian citizen and Abroad Citizen of India (OCI) within the age group of 65-70 years can even be a part of NPS and proceed as much as the age of 75 years, in line with a PFRDA round on the revised pointers.
2) Exit norms revised
On the exit circumstances for subscribers becoming a member of NPS past the age of 65 years, the round stated “regular exit shall be after 3 years”. “The subscriber will likely be required to utilise at the least 40 per cent of the corpus for buy of annuity and the remaining quantity could be withdrawn as a lump sum,” it stated. Nevertheless, if the corpus is the same as or lower than ₹5 lakh, the subscriber might decide to withdraw all the collected pension wealth in a lump sum, it stated.
3) Asset allocation norms modified
Making the Nationwide Pension System (NPS) extra engaging for subscribers becoming a member of it after 65 years of age, the PFRDA has permitted them to allocate as much as 50 per cent of the funds in fairness. The utmost fairness publicity, nevertheless, will likely be solely 15 per cent if subscribers becoming a member of NPS past the age of 65 years resolve to speculate below the default ‘Auto Selection’.
4) Untimely exit
The PFRDA additional stated exit earlier than the completion of three years will likely be handled as ‘untimely exit’. Underneath untimely exit, the “subscriber is required to utilise at the least 80 per cent of the corpus for buy of annuity and the remaining could be withdrawn in alump sum”. Within the case of untimely exit, if the corpus is lower than ₹2.5 lakh, the subscriber might decide to withdraw all the collected quantity in a single go.
5) Defer NPS account until 75 years
NPS account holders have been permitted to defer their account as much as the age of 75 years.
6) Extension of the web exit course of to the Authorities sector
PFRDA just lately prolonged the web and paperless technique of exit to the subscribers of the Authorities Sector. Earlier, solely non-government sector subscribers loved the end-to-end facility of the web exit course of. “The net exit can be built-in with Prompt Financial institution Account Verification as per the present pointers as a part of enhanced due diligence within the curiosity of Subscribers. The ability would even be out there to the staff of Autonomous Our bodies of Central/State Authorities who’re coated in NPS.”the regulator stated in a round dated 4 October 2021.
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