In NPS, now the entire amount can be invested in equity.
The Pension Fund Regulatory and Development Authority (PFRDA) has made a major change about the National Pension System (NPS). These changes will benefit the youth working in private sector, their own businesses and youth working on digital platforms. Till now, where there were many conditions and limitations to take pension, now people will get more flexibility and convenience in the new system.
Apart from this, now from 1 October 2025, non-government subscribers of NPS will be able to put their entire pension amount in 100% equity i.e. the stock market related scheme. Till now the investment limit in equity was 75%, but after this new rule this limit will be removed. The aim of this change is that subscribers should get more freedom and they can plan to save their retirement in a better way according to their age, need and ability to risk.
Till now, those investing in NPS had to choose only one type of scheme whether it was Tier 1 account or Tier 2. But now with the arrival of new MSP i.e. multiple scheme framework, subscribers will be able to divide their pension amount into different schemes.
In the first NPS, the age limit of investment was fixed for 60 years. That is, money could be deposited only by the age of 60 years. But now this rule has been changed. Now subscribers can withdraw their pension amount at the age of 50 or 55 years. On the other hand, if someone wants to continue investment, then he can deposit money from the age of 60 to 75 years.
Till now, it was mandatory to impose 40% of the deposits in the Pension Scheme (Annuity) at the time of retirement in NPS. But under the new rules, private sector employees will now have to put only 20% in pension. That is, now they will be able to extract 80% of their money outright on retirement. However, 40% imperative will still continue for government employees.
In the old rules, partial withdrawal could be done only three times during the investment period from the NPS account and each time the amount of withdrawal should have been more than the previous time. Now this limit has been increased to six times. This will give investors easy access to their money at the time of need.
Till now NPS was seen as long -term investment. But now a 15 -year plan is being started for private sector employees and people associated with self -employment. With this, people will also be able to join those who want to make retirement scheme for a short time.
The maximum age limit for taking pension from NPS or withdrawing money has been increased from 75 years to 85 years. That is, now any person can avoid the start of his pension by the age of 85 years. With this, the elderly will get the option to increase capital for a long time.
The government believes that these changes will prove to be extremely beneficial for digital platforms, freelancers and their own employment. People who were still deprived of retirement benefits due to not being associated with any company, will now be able to plan a safe future through NPS.
New schemes will also be helpful for corporate staff whose companies contribute under NPS. Now the contribution of both employer and employee can be connected more easily, which will make the retirement funds stronger.
It has been clearly stated in the circular that pension funds working under NPS (PF) will be allowed to charge a maximum of 0.3% of AUM (total investment). This fee will include fund management fees (IMF) and distribution fee to agents. All charges will be fixed and approved by PFRDA.
Even though new investment options are being given in NPS, but the rules related to security will remain the same. Investors will be given complete information about their returns and risk in a transparent manner, so that they can take a decision wisely. Pension accounts will also be portable, that is, if you want, you can easily transfer your account with any pension fund manager.
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