Over ₹10 lakh crore under its watch, NPS to ease withdrawal options

The state government, which ostensibly withdrew from the employee’s National Pension Plan (NPS) and returned to the old pension system, which guarantees 50% of the final salary as a monthly pension, continues to make appropriate contributions to the NPS corpus. there is

In August, 14 years and 3 months after the PFRDA-regulated NPS began actively managing retirement savings, where state employees make up the largest portion of the savings pool. It surpassed 1 million rupees on the 25th. Number of civil servants who have worked since January 1, 2004.

Formerly known as Pension Plan, NPS now offers a retirement plan for the unorganized sector through Atal Pension Yojana (APY). APY has 4.94 billion union members and 18.13 million regular sector employees, apart from administering the central pension and pension schemes. Retirement Savings for State Employees.

“NPS has made pensions accessible to all regardless of salary status and it took only 2 years and 10 months to go from 500 crore to 10 million rupees in assets under management.” Chairman Deepak Mohanty said. PFRDA members noted that the system currently has about 6.63 billion members.

There are close to 53 million state government employees, comprising about 44% of the NPS corpus, with about 49 million voluntary members and savings worth Rs 1.82 crore. According to PFRDA, 66 central public sector companies have logged on to NPS, and public sector banks have registered over 520,000 employees.

46% of APY members are women, but Mohanty said the ratio is much lower in other NPS schemes, around 27-28%. She attributed this to the widespread problem of low female labor force participation.

new option

Mohanty said the PFRDA has two major changes slated for as early as next month to expand the options available to NPS members when they retire. Currently, Superannuation requires a member to purchase an annuity with his 40% of his accumulated retirement savings and withdraw the balance.

“Going forward, members will be able to choose a plan that systematically withdraws 60% of their corpus, allowing them to receive a flat amount from their savings on a monthly, quarterly or semi-annual basis. It will be beneficial for those retiring during a bear market and will also help our members continue to generate higher returns under the NPS framework rather than looking for alternative investment options,” explained PFRDA Secretary. .

Additionally, for mandatory annuity purchases, members will be able to combine multiple schemes instead of a single scheme. Annuity products entail a fixed payment to the investor after the investor makes a lump sum investment. Some schemes guarantee the return of capital to the next of kin after the member’s death, but have lower regular income. “We are allowing our members to direct their annuity portion to different schemes and we are waiting for the necessary technical changes to roll out this feature,” Mohanty said.