NPS subscribers in for a retirement booster shot

The National Pension Scheme (NPS) is one of the most important government sponsored schemes. It provides larger eligibilty window for the Indian population to enroll and ensures long term financial security to its subscribers. The pension sector regulator  Pension Fund Regulatory And Development Authority Of India (PFRDA) is planning to make some changes in the scheme to make it even more appealing for the people.

The amendment in the PFRDA bill was presented in the Budget session in 2021. As per the reports, the voting on the bill will take place in the monsoon session of Parliament.

Here are the major changes made in the scheme to benefit the subscribers:

Entry and Exit Age

An amendment in the entry and exit age of the subscribers is anticipated in the NPS. At present, people from 18 to 65 years of age are eligible to sign up for this scheme. The regulator is planning to raise the limit to 70 years for someone who wants to enroll in the scheme. It is also expected that the exit age for NPS can be further lifted from 70 years to 75 years.

If the changes are approved, the subscribers will be able to make the most of this scheme for a longer period of time.

Growth in Exit Option

NPS subscribers can withdraw 60% of their amount after their retirement and rest 40% is kept for annuity. The people who are able to save upto ₹2 lakh are allowed to withdraw full amount at the time of retirement. This limit might be increased to ₹5 lakh in the upgraded scheme as the calculated amount of pension below this point turns out to be very little for survival.

Minimum Fixed Return

To enroll more and more subscribers in this scheme, PFRDA is planning to provide a minimum fixed return to its subscribers. For this, “we are planning to bring in a new product apart from NPS and Atal Pension Scheme to provide an assured return to the investors”, said Chairman of PFRDA Supratim Bandhopadhyay.