With a view to increase pension penetration and simplify investment in the National Pension Scheme (NPS), the pension fund regulator has introduced some new features.
PFRDA has taken various initiatives for the expansion of outreach of pension funds. Here are some features that PFRDA introduced to improve the operational efficiency of NPS.
Digitised APY
APY subscribers can now do away with submitting physical application forms and switch to the online mode of form submission. Subscribers have to submit their forms via the eNPS platform that was introduced last year. The eNPS platform that only accepted NPS subscriptions initially has now been expanded to accept APY contributions.
You choose your language
PFRDA has introduced a bilingual version of the eNPS module. Subscribers will now have an option to choose between Hindi and English as per their convenience and comfort level.
Signing in made easier with Aadhaar e-KYC
Earlier, it was mandatory for NPS subscribers using Aadhaar for registration to submit the physical application form within 90 days of registering under eNPS. However, now the eSign facility (Aadhaar e-KYC) has been introduced that can be integrated with the eNPS platform. This enables subscribers to sign in with their permanent retirement account number (PRAN) electronically.
NPS is now cheaper and more flexible
Investment in the low cost NPS has got cheaper after PFRDA appointed Karvy Computershare as the second Central Recordkeeping Agency (CRA), which quoted lower annual maintenance fees, transaction charges and account opening charges.
Also, the pension fund regulator now allows NPS subscribers to modify their investment choice and asset allocation twice in a financial year. Additionally, PFRDA allows pension fund managers to invest up to 5% of NPS corpus in Real Estate Investment Trust (REITs) and Infrastructure Investment Trusts (InvITs).
Why should advisors add retirement products to their investment gamut?
IFAs can expand their offerings by including retirement products like NPS. PFRDA is making efforts to empanel more distributors for NPS by easing the registration procedure and offering cross-selling facility. The pension fund regulator is moreover urging the government to make NPS an EEE (exempt-exempt-exempt)-from-tax product. Also, in the long run NPS can outperform other retirement products considering its low expense ratio and high exposure to equity.
