PFRDA increases age of joining NPS by 5 years

NEW DELHI: Pension sector regulator, Pension Fund Regulatory and Development Authority ( PFRDA) has increased the maximum age of joining under the National Pension System for private sector to 65 years of age from existing 60.

“With this increase of joining age, the subscribers who are willing to join NPS at the later stage of life will be able to avail the benefits of NPS,” the government noted in a statement adding that any Indian citizen under the new rules can continue to be a part of the NPS till the age of 70.

“This initiative will allow a larger segment of the society particularly senior citizens to reap the benefits of NPS and plan for their regular income,” the statement said.

Such subscribers will have the same choice for investments and pension funds as available to other subscribers.

The government in its statement noted that the subscribers will get two exit options. Under the normal exit from NPS after completion of three years in NPS, the subscriber will be required to utilize at least 40% of the corpus for purchase of annuity and the remaining amount can be withdrawn in lump-sum.

If a subscriber exits before completion of three years in the NPS, she will be allowed to do so, but in such case, the subscriber will have to utilize at-least 80% of the corpus for purchase of annuity and the remaining can be withdrawn in lumpsum.

In case of unfortunate death of the subscriber during his stay in NPS, the entire corpus will be paid to the nominee of the subscriber.

The statement said that the increase in joining age will provide the options to the subscribers who are at the fag-end of the employment and expecting lump-sum amount at the time of retirement, but willing to defer their retirement planning for future, to open the NPS account and contribute the lump-sum corpus to NPS for better fund management by Professional Fund Manager to fetch better returns and plan for the regular income after some time.