On May 8, 2019, the PFRDA, the regulatory body overseeing the operation and functioning of NPS or National Pension Scheme has announced some new investment options such as choice of funds and investment pattern in Tier I NPS account for central government subscribers. This is what you all should know:
NPS Rules Change For Government Subscribers
Pension fund choice: Like the other private sector subscribers, now on government subscribers will be able to invest in any of the pension funds. And they can even now choose private sector funds. Nonetheless, the current provision in respect of the public sector pension funds will still be available as a default option.
Also, government subscribers will be allowed to change their fund option once in a year.
Investment pattern choice
These have the following investment options:
1. Default option: Current scheme in which is done by the PFRDA as per the PFRDA guidelines among the PSU fund managers depending on their past performance.
2. Safest option: Individuals who seek fixed return with no risk can invest funds in government securities or Scheme G.
3. Higher returns option: Here you can invest as per your life cycle such as conservative and moderate life cycle fund.
Also, the circular said that the change in investment pattern or pension funds is allowed for incremental flows only. However it said, “to allow the transfer of accumulated corpus as per the new choices of the Government subscribers in a reasonable time frame of say five years. “