To provide relief to individuals saving for their retirement kitty through NPS or National Pension System, PFRDA or Pension Fund Regulatory and Development Authority has decided to raise the joining age for the scheme from the current 60 years to 65 years. As of now individuals' upto the age of 60 years can join the NPS scheme and contribute in it until attaining the age of 70 years. NPS subscribers also have the option to buy annuities with a deferment of 3 years from 60 to 63.
The scheme is open to all Indian nationals and provides an array of investment options for creating retirement corpus. A maximum corpus of 75% can be diverted towards equity if an investor chooses aggressive style. For risk averse investors, a substantial component of fixed income instruments is available. There are two accounts under the scheme, Tier I and Tier II. Tier I is a mandatory account for making contribution for retirement with tax benefits and withdrawal restrictions while Tier II is an optional savings facility.
Hemant Contractor, Chairman of PFRDA said to a leading online finance portal, "anyone from 18 to 65 years will be allowed to join". Further he said that the maximum age for making contribution under the NPS scheme shall remain unchanged at 70 years. This implies that a person who joins the scheme at 65 years will have an overall accumulation period of 5 years under NPS.
The decision in this regard has been taken after considering several feedbacks that the regulator receives from the market on an ongoing basis. And as people in their 60s also wanted to accumulate for their retirement through the scheme, PFRDA has taken such a move. Also, increasing longevity and longer work life is being factored in while taking the decision. The notification per se the move shall be issued shortly.