PFRDA said that the subscriber of NPS will have to use at least 40 per cent of the funds for the purchase of annuity. The rest of the amount can be withdrawn in a lump sum. The more money deposited in the annuity, the higher will be the return.
The government has made a big announcement for those taking pension scheme. This announcement has been made regarding the National Pension System ie NPS. Under this, the Pension Fund Regulatory and Development Authority (PFRDA) has made NPS more attractive. New provisions have been made to add people above 65 years of age. Under the new rule, now the depositors of NPS will be able to deposit up to 50 percent of the pension fund in equities or shares. This will increase the amount of pension and will get more money after retirement.
The rules for exiting NPS have been relaxed. That is, if someone wants to close the NPS account before time, then there will be no problem in it. Earlier, you could deposit only 40 percent of the equity or shares, which has been increased to 50 percent. Also, there was a compulsion of many rules for premature exit from NPS, which has been reduced. The depositor will be allowed to invest in equities, corporate bonds, government securities and alternate assets to generate higher returns on the fund. Now account holders above 65 years of age will be able to deposit only 5% of the amount in alternate assets. Those who are joining NPS after 65 years can exit after three years. That is, if the account holder wants, he can close the NPS only after three years.
You can take NPS till the age of 70
The age of joining NPS has been increased from 65 to 70 years. Along with this, PFRDA has improved the entry and exit rules in the NPS scheme. The age of entry in NPS has been improved from 18-65 to 18-70. Earlier, people from 18 years to 65 years could join NPS. Now this age limit has been increased from 18 to 70 years. By joining NPS in 70 years, an account holder can stay for 75 years. If someone has closed his NPS account earlier, then he can get it started again according to the new rule. According to the new rule, benefits will be given to that account holder.
Higher annuity means more profit
PFRDA said that the subscriber of NPS will have to use at least 40 per cent of the funds for the purchase of annuity. The rest of the amount can be withdrawn in a lump sum. The more money deposited in the annuity, the higher will be the return. On this basis, more money will come in the hands of the account holder. If the subscriber’s fund is five lakh rupees or less, then he can withdraw the entire added pension in one lump sum. Earlier this was not the rule. Exiting NPS before three years will be treated as ‘Premature Exit’. In this, the account holder will have to use at least 80 percent of the funds for the annuity. If the subscriber wants to exit NPS prematurely and his corpus is less than Rs 2.5 lakh, he can withdraw the entire amount added in one go.
Bankers also benefit
In another decision, the government has taken an important step to provide relief to the families of government bank employees. Under this, it was announced to increase the monthly family pension for them to 30 percent of the employee’s final salary. Earlier, the kin of deceased employees of public sector banks (PSBs) used to get a maximum monthly pension of Rs 9,284 as family pension. Now with the new decision, the family pension will increase from Rs 30,000 to Rs 35,000 per month. Along with this, the government also announced to increase the contribution of banks in the New Pension Scheme (NPS) from 10 percent to 14 percent. Banks deposit this amount in the NPS scheme on behalf of the employees.
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