BHUBANESWAR: Employees of state PSUs and autonomous bodies can now opt for a fully government-backed investment for long-term security of their retirement savings.
The Odisha government has allowed them to invest their entire pension contribution in government bonds by selecting pension fund managers and investment patterns under the National Pension System (NPS).
As per the notification issued by the Finance department, the pensioners will have the liberty to choose any one of the available pension fund managers, including those from the private sector. They can change their selected fund manager once in a financial year. However, for those who do not wish to make a choice, the existing system of fund allocation among three public sector pension funds will continue as the default option.
The notification came after the Pension Fund Regulatory and Development Authority, through a circular clarified that the state governments and state autonomous bodies are free to adopt these provisions voluntarily.
In terms of investment patterns under tier-I of NPS, three choices have been offered to the subscribers. The existing scheme in which funds are allocated among three public sector undertaking fund managers will continue as default scheme for both existing and new subscribers, who do not exercise any preference.
However, the employees seeking stable returns with lower risk can opt for scheme-G, which allows 100 pc investment in government securities. For those willing to take moderate risks for potentially higher returns, the auto choice life cycle funds are available. While the equity exposure has been capped at 25 pc for the conservative life cycle fund (LC-25), it will be maximum at 50 pc for the moderate life cycle fund (LC-50).
The notification stated that eligible NPS subscribers will be allowed to exercise their choice of investment pattern up to two times in a financial year. Earlier, the benefits were available to the state government employees.