NPS Fund Manager: Earlier, NPS subscribers did not have the facility to choose their pension fund fund manager. Now investors will be able to choose from three fund managers for different asset classes.
National Pension System (NPS) investors will now get a chance to earn more profits. The pension regulator has issued a circular regarding this. According to this, investors will be able to choose three fund managers for different asset classes. Under this investment, NPS customers can invest in different asset classes. These include equities, government bonds, corporate bonds, and alternative asset classes.
Earlier, NPS subscribers did not have the facility to choose their pension fund manager. When the subscriber chose a pension fund manager, the money that was put into different asset classes of NPS was managed by that manager. Meaning a fund manager looked after every asset. Now customers will choose different fund managers for each asset class.
These conditions must be followed
1. This facility requires customers to opt for active choice for asset allocation, not automatic.
2. Its benefits will not be available in the alternative asset class. The facility will be available only in equity, government securities, and corporate bond assets.
3. Its benefit will be available only in the category of all citizens (Tier-one), NPS corporate model (Tier-one), and Tier-three (all types of customers). Meaning, that government employees having a Tier-1 NPS account cannot avail of this facility, they will get the benefit only if they have a Tier-2 account.
4. New investors coming to the scheme will be able to choose different fund managers only after three months of registration.
How will it be beneficial?
If you have chosen HDFC Pension Fund as the fund manager for your NPS investment and you invest in equities and bonds, then the same fund will be managing both funds. Now you will be able to choose a different manager for equities and different managers for bonds. The advantage of this is that you will be able to choose a better fund manager according to your assets.
Facility to withdraw money in installments: Pension Fund Regulatory and Development Authority recently issued a circular informing that customers will get the facility of systematic lump sum withdrawal of lump sum in a phased manner. Now customers can have the option to withdraw 60 percent of their pension fund monthly, quarterly, half-yearly, or annually till the age of 75 years.