NPS Pensioners: Good news has come for lakhs of pensioners. Pension regulator PFRDA (Pension Fund Regulatory and Development Authority) is coming up with the Minimum Assured Return Scheme under the National Pension System (NPS). This will greatly benefit the pensioners.
Minimum assured return scheme will start
The Pension Fund Regulatory and Development Authority (PFRDA) has invited suggestions from the Request for Proposal for consultants to design the scheme. Earlier, Chairman of Pension Regulator Supratim Bandyopadhyay had said that discussions are being held with pension funds and actuarial firms in this regard. Under the PFRDA Act, a minimum assured return scheme is permitted.
The funds being managed under pension fund plans are marked-to-market. There are some ups and downs in it. These are evaluated on the basis of market conditions.
Know what is National Pension Scheme (NPS)
The Central Government had compulsorily implemented the National Pension Scheme for its employees on January 1, 2004. After this, all the states have implemented NPS for their employees. After 2009, this scheme has also been started for those working in the private sector. Employees can withdraw a part of NPS after retirement. Also, from the rest of the amount, you can take an annuity for regular income. Any person in the age group of 18 to 70 years can take advantage of NPS.
Know what advisors are saying
As per the RFP draft of PFRDA, the appointment of a consultant for preparation of the Guaranteed Return Scheme under NPS should not create a principal-agent relationship between PFRDA and the service provider.
As per the instructions of the PFRDA Act, the subscriber opting for a scheme under the National Pension Scheme which gives ‘Minimum Assured Return’, such scheme will have to be offered by the Pension Fund registered with the regulator. In this way the advisors will have to prepare a ‘Minimum Assured Return’ scheme for the existing and potential subscribers by the Pension Fund.