The National Pension Scheme (NPS) is a social safety initiative by the Central Government 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 in the course of the course of their employment. After retirement, the subscribers can take out a sure proportion of the corpus. NPS is regulated by the Pension Fund Regulatory and Development 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 mentioned in a press release,
Recently, there have been a number of adjustments to NPS guidelines. Take a glance:
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 Overseas Citizen of India (OCI) within the age group of 65-70 years also can be 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 mentioned “normal exit shall be after 3 years”. “The subscriber will be required to utilise at least 40 per cent of the corpus for purchase of annuity and the remaining amount can be withdrawn as a lump sum,” it mentioned. However, if the corpus is the same as or lower than ₹5 lakh, the subscriber might decide to withdraw your complete gathered pension wealth in a lump sum, it mentioned.
3) Asset allocation norms modified
Making the National Pension System (NPS) extra enticing 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 most fairness publicity, nonetheless, can be solely 15 per cent if subscribers becoming a member of NPS past the age of 65 years resolve to speculate underneath the default ‘Auto Choice’.
4) Premature exit
The PFRDA additional mentioned exit earlier than the completion of three years can be handled as ‘untimely exit’. Under untimely exit, the “subscriber is required to utilise at least 80 per cent of the corpus for purchase of annuity and the remaining can be withdrawn in alump sum”. In the case of untimely exit, if the corpus is lower than ₹2.5 lakh, the subscriber might decide to withdraw your complete gathered 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 net exit course of to the Government sector
PFRDA just lately prolonged the net and paperless means of exit to the subscribers of the Government Sector. Earlier, solely non-government sector subscribers loved the end-to-end facility of the net exit course of. “The online exit would be integrated with Instant Bank Account Verification as per the existing guidelines as part of enhanced due diligence in the interest of Subscribers. The facility would also be available to the employees of Autonomous Bodies of Central/State Government who are covered in NPS.”the regulator mentioned in a round dated 4 October 2021.
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