National Pension System is a well-known Government-backed retirement arranging scheme for each Government and non-Government sector personnel. NPS is regulated by the PFRDA. By the finish of FY22, the total asset beneath management beneath the NPS scheme is anticipated to rise by 30% to Rs 7.5 lakh crore.
As on September 25th 2021, there had been 18.28 lakh Private person enrolments, like 12.59 lakh subscribers from the corporate sector. The total quantity of Central government employee subscribers is 22.24 lakh, when state government subscribers are 53.79 lakh.
NPS is deemed low threat with a higher-return investment solution for post-retirement life with tax rewards as effectively. Recently, there had been many alterations to NPS guidelines. Take a look:
Extension of on the web exit method to Government sector NPS subscribers
PFRDA lately extended the on the web and paperless method of exit to the subscribers of the Government Sector as an solution in addition to the current physical mode of exit.
In a circular dated October 4, 2021, the regulator stated, “The online exit would be integrated with Instant Bank Account Verification as per the existing guidelines as part of enhanced due diligence in the interest of Subscribers. The facility would also be available to the employees of Autonomous Bodies of Central/State Government who are covered in NPS.”
New Entry Rule
The regulator lately improved the entry age into NPS to 70 years. Earlier the entry age was 65 years. Now, any person involving 18-70 years would be capable to subscribe to NPS. With the new entry age rule, even subscribers who have exited from NPS can reopen their accounts.
Defer NPS account till 75 years
NPS account holders have been permitted to defer their account up to the age of 75 years.
Asset allocation norms changed
Subscribers joining NPS just after 65 years can workout the option of Pension Fund and Asset Allocation with the maximum equity exposure of 15% and 50% beneath Auto and Active Choice respectively. According to PFRDA, Subscribers joining NPS just after 65 years can workout the option of PF and Asset Allocation with the maximum equity exposure of 15% and 50% beneath Auto and Active Choice respectively. The Pension Fund can be changed when per year whereas the asset allocation can be changed twice.
New exit guidelines
Now, there is a lock-in period of 3 years for new subscribers joining NPS just after 65 years. The maximum age for exit is 75. Subscribers can withdraw 60% of the corpus as a tax-absolutely free lump-sum and they want to use the remaining 40% for purchasing an annuity.
However, in case the corpus is under Rs 5 lakh, the subscriber can withdraw the whole quantity.
New premature exit rule
If you are arranging, premature exit from National Pension System (NPS), You will get only 20% of your accumulated wealth beneath NPS as a lump sum. With the remaining quantity, you will have to obtain an Annuity. This 80:20 rule will be applicable for each the Government and Non-Government sector subscribers joining NPS involving 18-60 years. However, in case of the Non-Government sector, the particular person should really be a subscriber for 10 years.