Pension fund regulator PFRDA has tweaked investment norms to allow subscribers of National Pension System to change their asset allocation twice in a financial year.
The new norms will come into effect from next financial year beginning April 1, the Pension Fund and Regulatory Development Authority (PFRDA), which is the regulator of NPS, said.
At present, NPS subscribers can shuffle their investments among equity, corporate bonds, and government securities only once a year.
"In order to provide more choices in terms of investment option and asset allocation ... the subscribers/corporates will have the choice for change of the investment option as well as asset allocation ratio two times in a year," the regulator said in a circular.
NPS subscribers get two options for investment - Active (flexibility to choose own asset allocation across equity, corporate bonds and government securities) or Auto Choice (investment is done as per the age).
They can allocate funds among equities, corporate bonds and government securities. The government's flagship social security programme, NPS restricts investment towards Equities Fund to 50 per cent of contribution amount for both Tier I and Tier II accounts.
However, the subscriber can invest up to 100 per cent in corporate bonds or government securities fund. The changes in the norms will be applicable for both the existing pension corpus as well as to the prospective subscriptions.
The option will be available separately for tier 1 and 2 accounts. However, the choice of change of pension fund remains only once in a financial year.