Centre may soon permit NPS members to raise equity exposure


Members of the National Pension System can soon opt for higher investments in equities as well as park a part of their retirement savings in new asset classes such as real estate and infrastructure investment trusts, mortgage backed securities and alternative investment funds registered with the stock market regulator.

Hemant Contractor, chairman of the Pension Fund Regulatory and Development Authority, said that non-government members of the National Pension System (NPS) can soon opt for two new investment strategies based on life cycle planning that will allow them to invest as much as 75 per cent of their savings in equities at the age of 35 years. Presently, the highest equity exposure allowed for NPS subscribers is 50 per cent of their corpus.

Similarly, for those with a conservative outlook to investing, a new life-cycle fund with equity allocation of 25 per cent at the age of 35 years is being introduced. As per the life cycle investment strategy, the pension fund manager automatically reduces exposure to equities as a person gets closer to retirement age.

The NPS presently manages retirement savings of about Rs.1.45 lakh crore belonging to 1.34 crore workers, including central and state government employees, voluntary private sector members and low-income workers that are part of the Atal Pension Yojana entailing a co-contribution from the Centre.

“We are looking to introduce an auto-enrolment feature so that certain type of workers that benefit from government support like Asha workers and Anganwadi workers are automatically enrolled into the Atal Pension Yojana unless they opt out of it,” Mr. Contractor said. Such beneficiaries will also be offered the Rashtriya Swasthya Bima Yojana, so that they can get both pension as well as health insurance benefits, he said.

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Printable version | Dec 15, 2019 11:25:53 AM |

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