Great news for National Pension System (NPS) investors! The pension regulator, PFRDA (Pension Fund Regulatory and Development Authority), has introduced a new feature.
NPS subscribers can now select up to three pension fund managers for different types of investments.
Here are the key details
Investment Options: NPS allows investment in various asset classes, including Equity (E), Government Bond (G), Corporate Bond (C), and Alternate Asset Class (A).
New Rules: Previously, NPS subscribers could only choose one fund manager to oversee all their investments.
Now, they have the flexibility to select different fund managers for each asset class.
Important Conditions
1) Subscribers must opt for the active choice for asset allocation, not the auto mode.
2) This option is available only for equity, government security, and corporate bond assets, not for alternate asset classes.
3) Applicable to the existing All Citizen Model (Tier-I), NPS corporate model (Tier-I), and Tier-II (All subscribers) categories.
Government employees with Tier-1 NPS accounts can use this feature only for Tier-2 accounts.
4) New investors can choose multiple fund managers three months after joining the scheme.
Benefits
Imagine you’ve selected HDFC Pension Fund for your NPS investments in both equity and bonds.
Previously, this fund would manage both. Now, you can pick different fund managers for each, allowing you to select the best manager for each asset.
Withdrawal Flexibility
PFRDA has also introduced a phased systematic lump sum withdrawal facility.
Subscribers can now withdraw 60% of their pension corpus monthly, quarterly, half-yearly, or annually until the age of 75.
These changes offer more flexibility and choice to NPS investors, helping them tailor their investments to their preferences.
