For the workers of state governments, state autonomous bodies, and Central autonomous bodies, upon working out the selection of investment schemes and pension funds, their whole accumulated corpus beneath their PRAN account shall be transferred to the opted pension fund or asset allocation in one instance. Earlier in June 2020, it was decided that State Governments (SGs) / SABs (State Autonomous Bodies)/ CABs (Central Autonomous Bodies) are no cost to adopt the provisions based on their personal internal approvals and notifications, without having in search of the PFRDA approval.
It was recommended that the transfer of a enormous legacy corpus in respect of Government subscribers from the current Pension Funds is probably to effect the market place. It might be virtually hard for the PFRDA to enable Government subscribers to modify the Pension Funds or investment pattern in respect of the accumulated corpus, in one go. Therefore, for the present, modify in the Pension Funds or investment pattern is permitted in respect of the incremental flows only.
New NPS guidelines
Now, in its February 15, 2021, circular, PFRDA has clarified the following:
In case the State Governments (SGs) / SABs (State Autonomous Bodies)/ CABs (Central Autonomous Bodies) make a decision to open up the selections of Pension Funds and/or allocation of funds, then please note that upon physical exercise of selection of investment schemes and pension funds by subscribers, their whole accumulated corpus beneath their PRAN account shall be transferred to the opted Pension Fund(s) / asset allocation in one instance.
In case of the subscribers, who have currently exercised this alternative, their legacy fund shall be transferred to the Pension Fund and asset allocation opted by the subscribers instantly. The identical is now becoming followed for the Central Government subscribers as nicely.
The above arrangements are applicable with quick impact from the date of issuance of this circular.
For streamlining the implementation of the National Pension System (NPS), the Gazette Notification dated 31st January 2019 issued by the Ministry of Finance, Department of Financial Services had currently modified the Ministry of Finance’s Notification dated 22nd December 2003.