The upper age limit for joining the National Pension System (NPS) has been raised to 65 years from the current 60, the Pension Fund Regulatory and Development Authority (PFRDA) announced on 11 September 2017. PFRDA Chairman Hemant Contractor made the announcement at a conference here on “Transferring Superannuation Funds to National Pension System” and said the pension regulator’s board had already approved the change and it would be notified shortly.
NPS is currently open for people between 18 and 60, and our Board has approved raising the age limit for joining to 65. The scheme anyway has the option of continuing and making contributions up to the age of 70. Explaining that the rationale behind government reforms in pensions is to facilitate “portability” or the transfer of superannuation funds by making the NPS more attractive and customer-friendly, he said the measures were designed to give the pension scheme an “unbundled architecture to make it as competitive as possible”.
The regulator also said that PFRDA had asked the Central Board of Direct Taxes (CBDT) to provide a blanket approval for the transfer of superannuation funds to the NPS, but was still awaiting a response from the CBDT. He suggested that companies should individually take up this matter with the CBDT, as the PFRDA is yet to hear from the income tax department. There are various investment options available to an NPS subscriber ranging from equity and secure government bonds to life-cycle funds. Equity investment of a subscriber’s funds can go up to 75 per cent of their contribution if one chooses the life-cycle fund. It also offers less risky options with a heavy component of fixed income investment.