The maximum age of entry into the National Pension System (NPS) may get increased by five years to 70, as the regulatory body the Pension Funds Regulatory and Development Authority (PFRDA) is planning to increase the number of beneficiaries under the scheme.
Previously, the PFRDA had increased the age limit from 60 to 65 some three years ago. On April 15, PFRDA Chairman Supratim Bandyopadhyay said at a virtual press conference that around 15,000 people above 60 joined NPS since the entry age limit was raised from 60 to 65 three years ago.
Additionally, PFRDA is planning to let NPS subscribers, who join at the age of 60 plus, continue their accounts till they age 75. The maturity age for other subscribers who join the scheme below 60 years of age will remain 70.
Moreover, there is also a proposal to hike the maximum corpus limit to Rs 5 lakh from the current Rs 2 lakh. This means that subscribers can get up to Rs 5 lakh at the time of retirement or exit of the scheme, without the need to purchase an annuity.
Currently, there are around 12 insurance providers that offer annuity products and are approved by the PFRDA. Around eight fund managers are currently investing all the NPS fund in various schemes they have opted for.
What is NPS?
The Indian government had launched National Pension System (NPS) in 2009. The scheme offers an investment opportunity to all organised sector employees working in India.
How beneficial is NPS?
Since the inception of NPS in 2009, the pension fund managers affiliated with the PFRDA have generated impressive returns. In the equity schemes, they have generator a 12.03 % return, 10.02% in corporate bonds, and 9.66% in government securities.