NPS entry age limit may be raised to 70 years, exit to 75
NPS started with the decision of the Government of India to stop defined benefit pensions for all its employees who joined after 1st April 2004. The Pension Funds Regulatory and Development Authority (PFRDA) is looking to raise the maximum age of entry into the National Pension System (NPS) to 70 years from 65.
Moreover, we are also looking at allowing subscribers who join after the age of 60. To continue their NPS accounts till the age of 75, said PFRDA chairman Supratim Bandyopadhyay. At present, the age limit to continue NPS accounts is 70.
On the other side, Bandyopadhyay noted that around 15,000 subscribers over the age of 60 have joined the NPS. Over the past three-and-half years after the age limit was raised to 65 from 60. While the pension authority regulates both NPS and Atal Pension Yojana. APY has registered 23% growth in its subscriber base under both schemes with over 42.4 million subscribers by March 31st. Total assets under management stood at Rs. 5.78 lakh crores.
Meanwhile, last year was an extremely challenging year because of COVID-19 restrictions but still, there has been growth, said Bandyopadhyay. Adding that the PFRDA expects to add around 10 million new subscribers in the current financial year for NPS and APY combined, up from 8.3 million in the past financial year. The pension regulator is also considering a proposal to increase the limit for full withdrawal of the pension amount by Rs. 3 lakh.
Just now, full withdrawal is only permissible if the pension corpus is Rs. 2 lakh or less. PFRDA will soon come out with a request for proposals (RFP) for the design of minimum guaranteed pension products in the NPS. While it will also open a 45-day window allowing “on tap” licenses for pension fund managers.