PFRDA to lift max age for admission below NPS to 70

The National Pension System (NPS) is ready to confess new subscribers as previous as 70, introduce a assured pension scheme, and permit full withdrawals as much as ₹5 lakh on maturity, India’s pension regulator stated.

Around 15,000 individuals above 60 joined NPS for the reason that entry age restrict was raised from 60 to 65 three years in the past, Pension Fund Regulatory and Development Authority (PFRDA) chairman Supratim Bandyopadhyay stated at a digital press convention on Thursday.

PFRDA has additionally proposed to permit subscribers who be part of after 60 to proceed their NPS accounts until 75. For others, the maturity age will stay 70.

Besides, the regulator has proposed a minimal assured pension product below NPS, Bandyopadhyay stated. At current, the NPS is an outlined contribution system, which signifies that whereas the contribution to NPS is mounted, the maturity quantity relies on the efficiency of the pension funds.

The authority plans to ask bids for designing such a product in 15-20 days.

The PFRDA, which not too long ago invited purposes to concern recent licences for pension fund managers, plans to open a second window of round 45 days for brand spanking new candidates, Bandyopadhyay stated.

Based on the expertise with this, the regulator would institute an ‘on tap’ licensing system. This would imply purposes will be made and processed all by way of the yr. In the newest spherical, PFRDA granted a licence to Axis Asset Management Co. and in addition renewed licenses of current pension fund managers.

However, two entities, Aditya Birla Sun Life Pension Fund and Kotak Pension Fund, are but to fulfill sure regulatory necessities for the licence.

The regulator can be contemplating a rise within the charges that may be charged by NPS brokers, that are referred to as factors of presence, Bandyopadhyay stated.

PFRDA has additionally proposed to permit subscribers to ‘commute’ or totally withdraw their pension corpus whether it is under ₹5 lakh, one thing that’s now allowed solely as much as ₹2 lakh. About 40% of such withdrawals will probably be taxable, with the remaining 60% being tax free. The taxable quantity is added to the subscriber’s complete earnings and can entice tax on the slab price.

The regulator is eyeing a rise in subscribers in NPS by 1 million within the present monetary yr, up from round 600,000 in FY21. For NPS and Atal Pension Yojana (APY) mixed, the PFRDA expects so as to add round 10 million new subscribers in FY22, up from 8.3 million in FY21.

The PFRDA oversees property of round ₹5.78 trillion below NPS and APY and has 42.4 million subscribers as of 31 March 2021.

“Life expectancy in India has elevated and a superb social safety system is missing. There aren’t sufficient financial savings merchandise for senior residents. So, the transfer to hike the utmost age of entry into the NPS is an effective one. Similarly, if a assured minimal pension is created, NPS and EPF will develop into extra fungible and staff have extra selection on which system to decide on,” stated Narayanan Sadanandan, the managing director and chief government officer of SBI Pension Fund.

neil.b@livemint.com

Subscribe to Mint Newsletters * Enter a legitimate electronic mail * Thank you for subscribing to our publication.