PFRDA to launch new pension scheme with equal mix of equity, debt by August

This replaces the existing system where the allocation for equity funds decreases gradually starting at age 35.
PFRDA to launch new pension scheme with equal mix of equity, debt by August

NEW DELHI: The Pension Fund Regulatory and Development Authority (PFRDA) is preparing to introduce a new version of the National Pension Scheme (NPS) that will enable contributors to retain 50% of their investment in equity funds until they reach the age of 45.

This replaces the existing system where the allocation for equity funds decreases gradually starting at age 35. PFRDA chairman Deepak Mohanty briefing the media on Friday during Annual Felicitation Programme for Atal Pension Yojana (APY) in New Delhi said the NPS balance lifecycle scheme could be introduced in July or August. “...

The fund will be an additional option in the auto choice where equity allocation can be a maximum of up to 50%, but the tapering would start only after 45 years of age. This will help subscribers accumulate more corpus in their individual retirement fund,” said Mohanty.

Mohanty stated that existing NPS participants will have the choice to switch to the new scheme, and all pension funds will provide the updated NPS Balance Lifecycle option to their members. Currently, total assets under management (AUM) of NPS and APY are at Rs 12.4 trillion, with PFRDA aiming to achieve Rs 15 trillion by FY25.

NPS holds the majority of these AUM, with APY representing a smaller portion of Rs 38,000 crore. Meanwhile, Mohanty also stressed upon plans to expand NPS outreach via regional rural banks.

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