NPS Subscribers Allowed To Withdraw Fund For Studies, Setting Up Biz

INSUBCONTINENT EXCLUSIVE:
Authors: Jordan Pension fund regulator
PFRDA on Thursday said the National Pension System (NPS) subscribers will now have the option to partially withdraw funds from their
accounts for pursuing higher education or setting up new business
The decision was taken at the board meeting of the Pension Fund and Regulatory Development Authority (PFRDA) last week."Partial withdrawals
will now be allowed to National Pension System (NPS) subscribers who wish to improve their employability or acquire new skills by pursuing
higher education/ acquiring professional and technical qualifications," the PFRDA said in a statement
At present, NPS and Atal Pension Yojna (APY), both regulated by the PFRDA, have a cumulative subscriber base of over 2.13 crore with total
asset under management (AUM) of over Rs 2.38 lakh crore.: Post Office Saving Schemes: National Pension System (NPS) Income Tax Benefits,
Transaction ChargesNPS Withdrawal Criteria Now Includes Education
Five Things To Know1
Partial withdrawal is allowed for the education of subscribers and also for setting up of business
The subscribers who wish to set up a new business or acquire new business will also be allowed to make partial withdrawals from their
contributions
NPS is government's flagship social security programme.2
The board also decided to increasing the cap on equity investment in 'active choice' category to 75 per cent from current 50 per cent for
private sector subscribers of NPS
However, the option of increasing investment in equity will be available to subscribers till the age of 50 years.3
NPS offers subscribers to design their own portfolio based on two investment options -- 'Auto Choice' and 'Active Choice'
Subscribers opting for 'active choice' option, can invest in 'Alternate Investment Fund' up to 5 per cent, besides the three regular
instruments -- equity, G-Secs and corporate bonds.: NPS New Rule: Bank Account, Mobile Number Made Mandatory For Subscribers4
The PFRDA board also approved a proposal on changing the investment grade rating from 'AA' to 'A' for corporate bonds
"The change is subject to a cap on investments in 'rated bonds to be not more than 10 per cent of the overall corporate bond portfolio of
the pension funds," it said
This initiative will enlarge the scope of investment for the fund managers while ensuring credit quality, it added
The PFRDA has taken this decision in pursuance of an announcement in the Union Budget.5
A proposal on adoption of Common Stewardship Code, as a measure of good corporate governance, was also approved
"Further, it was also approved that the principles enumerated in such code shall be circulated to all pension funds for compliance and
implementation," the PFRDA said in the release
Adoption of these Principles by Pension Funds will improve their engagement with investee companies and benefit subscribers, it added.