Investors in the National Pension System (NPS) have reason to rejoice as the Pension Fund Regulatory and Development Authority (PFRDA) introduces a significant rule change, granting subscribers increased flexibility in managing their retirement portfolios.
The circular issued by PFRDA outlines a pivotal shift,
allowing NPS investors to opt for up to three pension fund managers, each dedicated to different asset classes.
Diversified Investment Opportunities:
Under this new directive, NPS subscribers gain the ability to diversify their investments across various asset classes, including Equity (E), Government Bond (G), Corporate Bond (C), and Alternate Asset Class (A).
This move departs from the previous structure where investors were restricted to a single fund manager for their NPS contributions.
Prior to this rule change, NPS subscribers were limited to a single pension fund manager selection.
Once a fund manager was chosen, the allocated funds for the respective asset class were managed exclusively by that selected fund manager.
Systematic Lump Sum Withdrawal Facility:
In a recent circular, PFRDA introduced another progressive measure for NPS subscribers. Investors now have the option to withdraw 60% of their pension corpus systematically in lump sums, allowing for monthly, quarterly, half-yearly, or annual withdrawals until the age of 75 years.
This phased withdrawal facility provides additional flexibility to NPS subscribers in managing their post-retirement finances.
Empowering Investors with Choices:
The latest changes signify a significant step toward empowering NPS investors, enabling them to make strategic decisions aligned with their financial goals and risk appetite.
The ability to choose multiple fund managers enhances the customization options for investors seeking a diversified and well-managed retirement portfolio.
As the NPS continues to evolve, these measures reflect a commitment to adaptability and investor-centric policies,
ultimately benefiting those planning for a secure and flexible retirement.