National Pension Scheme (NPS) subscribers can now keep their “default” investment model and pension fund manager (PFM) even after retirement. The Pension Funds Regulatory and Development Authority (PFRDA) said, according to a report by BusinessLine (BL)that retirees are not required to submit a request in this regard.
Until now, retirees could not contribute to their NPS account after retirement. They had to submit a separate request for the same thing. After the new rule, they can choose to continue with the existing plan or choose a new PFM and investment plan.
This decision will come as a relief for more than 30,000 government employees.
As part of the “default” investment plan, CNP’s contributions are invested in shares with a ceiling of 15%. The rest is invested in government securities and corporate bonds.
Several employees had approached the PFRDA to express their willingness to continue the “default” model and the PFMs. The government provides three GFPs to employees, namely the LIC pension fund, the SBI pension fund and the UTI pension fund.
However, given the high average returns of up to 7-8%, retirees were far from choosing a new investment model.
Recently, the PFRDA has proposed a process to enable NPS lump sum withdrawals through a Systematic Lump Sum Withdrawal (SLW) facility through automation. Withdrawal was allowed monthly, quarterly, semi-annually and annually until the beneficiary reached age 75.
Currently, the sum can be withdrawn in a single installment or on an annual basis.