Insurance

Maximum age of joining National Pension System (NPS) increased from the existing 60 years to 65 years

01.11.2017

Pension Fund Regulatory and Development Authority (PFRDA) has increased the age of joining under NPS-Private Sector from 60 years to 65 years in order to give more benefits to citizens. National Pension System (NPS) is administered and regulated with transparent investment norms by PFRDA. The NPS is a voluntary, defined contribution retirement savings scheme evolved to enables the subscribers to make optimum decisions regarding their future through systematic savings. NPS inculcate the habit of saving for retirement amongst the citizens. From now onwards, Indian Citizen, resident or non-resident, between the age of 60- 65 years, can also join NPS and continue up to the age of 70 years in Pension Scheme. After the said increase, the subscribers who are willing to join NPS at the later stage of life will also be able to avail the benefits of NPS.

The subscriber joining NPS beyond the age of 60 years will have the same choice of the Pension Fund as well as the investment choice as is available under the NPS for subscribers joining NPS before the age of 60 years. Subscriber joining NPS after the age of 60 years will have an option of normal exit from NPS after completion of 3 years in NPS. In this case, the subscriber will be required to utilize at least 40% of the corpus for purchase of annuity and the remaining amount can be withdrawn in lump-sum. In case of such subscriber willing to exit from NPS before completion of 3 years in the NPS, he/she will be allowed to do so, but the subscriber will have to utilize at-least 80% of the corpus for purchase of annuity and the remaining can be withdrawn in lumpsum. In case of unfortunate death of the subscriber during his stay in NPS, the entire corpus will be paid to the nominee of the subscriber.

Under the NPS, subscribers have control on the choice of investment made and the fund manager who manages the investments. Subscribers can switch over from one investment option to another or from one fund manager to another subject, of course, to certain regulatory restrictions. The increase in joining age will provide the options to the subscribers who are at the fag-end of the employment and expecting lump-sum amount at the time of retirement, but willing to defer their retirement planning for future, to open the NPS account and contribute the lump-sum corpus to NPS for better fund management by Professional Fund Manager to fetch better returns and plan for the regular income after some time. The Annuity rates available in the older age fetch better annuities than that at the age of 60 or less age. Retirement planning involves disciplined saving, vigilant investment to build a sufficient retirement corpus which can be achieved by joining a pension/retirement plan at an early stage in one’s life. This initiative will allow a larger segment of the society particularly senior citizens to reap the benefits of NPS and plan for their regular income.

Tags : Age Increase NPS

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