PFRDA allows 50% allocation in equities in NPS for subscribers joining after 65 years of age
As per increased age eligibility norms, the subscribers who have closed their NPS accounts are allowed to open a new account.
The Pension Fund Regulatory and Development Authority (PFRDA) has permitted to allocate up to 50% of the funds in equity, apart from easing the exit norms for subscribers joining after 65 years. The guidelines have been revised by PRFDA, on entry and exit norms after an increase in the maximum age for joining the NPS from 65 years to 70 years of age. The revised age group for NPS is 18-70 years now. It was 18-65 years before. According to PRFDA, any Indian citizen and Overseas citizen of India (OCI) in the age group of 65-70 years is eligible to join NPS. He/She can continue up to 75 years of age. As per increased age eligibility norms, the subscribers who have closed their NPS accounts are allowed to open a new account.
According to the circular issued by PRFDA, “the subscriber, joining NPS beyond the age of 65 years, can exercise the choice of PF (pension fund) and asset allocation with the maximum equity exposure of 15% and 50% under Auto and Active Choice, respectively.”
Through ‘Active Choice’ or ‘Auto Choice’ an NPS subscriber can allocate the contributions to the different asset classes. A subscriber has more say on allocation of funds across assets in ‘Active Choice’. The funds in the case of ‘Auto Choice’ gets invested in pre-determined proportion as per the age of the subscribers.
Subscribers joining the social security scheme beyond the age of 65 years can allocate only 5% of the funds to alternate assets under ‘Active Choice’. This asset class is not available under the ‘Auto Choice’ option. Once a year the PF can be changed, however asset allocation can be changed twice.
The circular said “normal exit shall be after 3 years”, on the exit conditions for subscribers joining NPS beyond the age of 65 years.
The circular said that at least 40% of the corpus should be utilised by subscribers for the purchase of annuity and the remaining amount can be withdrawn as lump sum.
An exit before the completion of three years will be a ‘premature exit’, it added further