NPS to allow 4 changes per fiscal in investment pattern
The Pension Fund Regulatory and Development Authority (PFRDA) will soon allow subscribers to the National Pension System (NPS) scheme to change their investment pattern as many as four times during a financial year, its chairman Supratim Bandyopadhyay announced on Tuesday. There has been a demand to increase the limit, he added.
Subscribers to the National Pension System (NPS) are currently permitted to change their investment pattern twice every financial year. “It is possible to change one’s investment choice twice a year. Assocham organised a webinar on the NPS programme, which he spoke at. “Now, in a very short period of time, we are going to extend it to four times because there have been suggestions that you enable more number of times (to change the investing pattern),” he stated.
It is simply important to remember that this is a long-term investment (product) that is used to establish a pension corpus, and that it should not be treated in the same way as a mutual fund scheme, according to the PFRDA.
Some people confuse it with some sort of mutual fund, which can produce good returns on a consistent basis. You must give it some time before you may use it, and then only you can utilise it (changing option). To encourage prudent use, the Pension Fund Regulatory and Development Authority’s chairman said that it would be increased to four times a year (financial year) starting in 2018.
A variety of instruments, including government securities, debt instruments, asset-backed and trust-structured investments, short-term debt investments, and equities and associated investments, are available for subscribers to allocate their investments in.
For different groups of subscribers, there are, however, distinct rules to adhere to. Employees in the government sector, for example, are not permitted to have a significant amount of exposure to stocks, whereas employees in the corporate sector are permitted to allocate up to 75% of their assets to equities.
Alternatively, customers are also given the option to switch fund managers once a calendar year. Fund managers spend the pension assets of subscribers in the prescribed investment schemes of their choosing, according to their preferences.
ICICI Prudential Pension Funds Management Company, LIC Pension Fund, Kotak Mahindra Pension Fund, SBI Pension Fund, UTI Retirement Solutions, HDFC Pension Management Co, and Birla Sun Life Pension Management are the current pension fund managers under the National Pension System (NPS), according to the NPS website.
In addition, Bandyopadhyay stated that the PFRDA intends to give its subscribers a variable annuity plan after they retire, with the goal of protecting them against inflation. “Once the annuity begins, it will remain constant for the rest of your life. It’s true that there is one annuity (product) that provides a basic increase of three percent every year, but that will not protect you from the risk of inflation, which is a concern.
Irdai has been in contact with him, and he has asked annuity service providers whether they can think of a variable annuity that can provide some protection against inflation. “We have been in contact with the insurance regulator (Irdai)… and we have asked annuity service providers whether they can think of this kind of variable annuity that can provide some protection against inflation,” he said.
According to the chairman of the PFRDA, the Insurance Regulatory and Development Authority of India (Irdai) has formed a working committee, and the committee has also given a report to the authority.
“We are already in discussions with Irdai to ensure that those kind of items are released as soon as possible,” he continued, adding that
It is simply important to remember that this is a long-term investment (product) that is used to establish a pension corpus, and that it should not be treated in the same way as a mutual fund scheme, according to the PFRDA.
Some people confuse it with some sort of mutual fund, which can produce good returns on a consistent basis. You must give it some time before you may use it, and then only you can utilise it (changing option). To encourage prudent use, the Pension Fund Regulatory and Development Authority’s chairman said that it would be increased to four times a year (financial year) starting in 2018.
A variety of instruments, including government securities, debt instruments, asset-backed and trust-structured investments, short-term debt investments, and equities and associated investments, are available for subscribers to allocate their investments in.
For different groups of subscribers, there are, however, distinct rules to adhere to. Employees in the government sector, for example, are not permitted to have a significant amount of exposure to stocks, whereas employees in the corporate sector are permitted to allocate up to 75% of their assets to equities.
Alternatively, customers are also given the option to switch fund managers once a calendar year. Fund managers spend the pension assets of subscribers in the prescribed investment schemes of their choosing, according to their preferences.
ICICI Prudential Pension Funds Management Company, LIC Pension Fund, Kotak Mahindra Pension Fund, SBI Pension Fund, UTI Retirement Solutions, HDFC Pension Management Co, and Birla Sun Life Pension Management are the current pension fund managers under the National Pension System (NPS), according to the NPS website.
In addition, Bandyopadhyay stated that the PFRDA intends to give its subscribers a variable annuity plan after they retire, with the goal of protecting them against inflation. “Once the annuity begins, it will remain constant for the rest of your life. It’s true that there is one annuity (product) that provides a basic increase of three percent every year, but that will not protect you from the risk of inflation, which is a concern.
Irdai has been in contact with him, and he has asked annuity service providers whether they can think of a variable annuity that can provide some protection against inflation. “We have been in contact with the insurance regulator (Irdai)… and we have asked annuity service providers whether they can think of this kind of variable annuity that can provide some protection against inflation,” he said.
According to the chairman of the PFRDA, the Insurance Regulatory and Development Authority of India (Irdai) has formed a working committee, and the committee has also given a report to the authority.
“We are already in discussions with Irdai to ensure that those kind of items are released as soon as possible,” he continued, adding that
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