NEW DELHI: There's some good news for investors who want to invest in the National Pension System (NPS). In a bid to make NPS schemes more attractive, the government is now planning to allow investors to invest in the scheme via Systematic Investment plan or SIP.
Sources say that the Pension Funds Regulatory and Development Authority of India (PFRDA) is working on it and may announce the SIP facility in NPS by November, this year.
"The agencies are working on it and it is in the final stage. Testing is on for any technical snag. By November, it will be ready for launch. This will really help small investors to invest in the scheme, " a senior PFRDA official said.
Once it is launched, investors can set up automated bank payments at regular intervals toward their investment plan, just like how SIP in mutual funds works.
The PFRDA is working to aggressively promote the NPS scheme and has announced several initiatives, including offering another chance to those subscribers who have prematurely exited the scheme to join back. Subscribers can do so through e-deposit of the withdrawn amount or opening of a new Permanent Retirement Account Number (PRAN).
Also for the benefit of NPS subscribers, the regulator has allowed e-sign based online facility for change of nomination. Officials claim that these initiatives were taken post Covid-19 as the number of subscribers were gradually going down.
As per the latest NSO data, only 4,969 subscribers joined in July, 2020 in NPS from the central government sector compared with a monthly average of 9,213 in FY19 and 9,904 in FY20.
Similarly from the state government sector, only 22,473 joined the NPS in July 2020 compared with a monthly average of 45,209 in FY19 and 41,333 in FY20. NPS was introduced in January 1, 2004 for new entrants into the central government service replacing the old pension system.
NPS was also made applicable to new employees of all autonomous bodies of the central government and later various state governments also adopted the scheme.