The government is introducing the mega Pension plan to the people of the country.
The government has extended the New Pension System to all citizens of the country with effect from 1 May. The Interim pension regulator Pension Fund Regulatory Development Authority (PFRDA) confirmed the scheduled launch of the mega pension plan.
PFRDA has said that it has put in place the “the necessary infrastructure” for the rollout of the NPS. The NPS would be made operational under the tier-I non-withdrawable framework, while tier-II (withdrawable account) of the NPS account will become operational in about six months, the PFRDA has said. Any citizen between the age of 18 and 55 can join the NPS. The PFRDA has set a minimum annual contribution of Rs 6,000 in each subscriber account. The subscriber will have to have a minimum of four transactions of Rs 500 each in a year.
The equity exposure limit was reduced based on the recommendations of the board of trustees of the NPS and the advice of the government.
The final investment norms allow subscribers to invest their entire savings in government securities or corporate, state and municipal bonds, which are less risky than equities. As per the revised ‘auto choice’, half of the investments of subscribers up to an age of 35 years will go into equities, one-fifth into central and state government bonds, and the rest into corporate bonds and select other instruments, including fixed deposits. At the age of 60, these investments will gradually be adjusted so that only one-tenth remains in equities, another one-tenth in corporate bonds and 80% in central and state government bonds.
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