Withdrawal from NPS gets easier. In its board meeting, PFRDA has relaxed partial withdrawal norms for NPS subscribers. With this development, NPS subscribers can withdraw their money from their corpus to fund their entrepreneurial dream or professional skill development.
PFRDA said, “Partial withdrawals will now be allowed to NPS subscribers who wish to improve their employability or acquire new skills by pursuing higher education, acquiring professional and technical qualifications. Further, individual NPS subscribers who wish to set up a new business, acquire new business will also be allowed to make partial withdrawals from their contributions. Other terms applicable to partial withdrawals will remain unchanged.”
Here are the other key development in NPS
NPS can now invest in low rated debt securities: Pension fund managers can now invest up to 10% of NPS corpus in debt securities having credit ratings of ‘A’ for corporate bonds. PFRDA said that the move aims at enlarging the credit quality for the fund managers.
Increasing transparency: Pension fund managers will have to adopt common stewardship code to ensure good corporate government. This amendment aims to improve the engagement of pension fund houses with investee companies and to benefit subscribers.
Higher equity exposure for better returns: Increasing cap on equity investment in active choice to 75% from the current 50% for private sector subscribers. Currently, there is a cap of 50% on equity investment under active choice in NPS. “The proposal on increasing cap on equity investment in active choice to 75% from currently 50% has been approved by the Board. However, it comes with a clause of tapering off the equity allocation after the age of 50 years,” said PFRDA.
