Monday, May 23, 2022

PFRDA: Exciting pension news! Under the NPS, a ‘guaranteed return’ will be accessible; learn about the government’s strategy.

NPS Guaranteed Return Program: There’s some good news for retirees. For the first time, the PFRDA has begun this process by appointing consultants to implement the Minimum Assured Return Scheme. Let’s go into the specifics.

NPS Guaranteed Return Program: There is good news for the country’s millions of retirees. Under the National Pension System, the pension regulator PFRDA will introduce the Minimum Assured Return Scheme (MARS) (NPS). Please inform us of the government’s unique program.

PFRDA will hire a consultant.

The Pension Fund Regulatory and Development Authority (PFRDA) has issued a Request for Proposal (RFP) to consultants for this scheme’s design. PFRDA President Supratim Das Bandyopadhyay has stated that “talks with pension funds and actuarial firms are ongoing in this regard.”

The PFRDA Act provides for a minimum guaranteed return system. Pension plans deal with funds that are marked to market and have ups and downs. Market factors dictate their worth.

What will the consultant actually do?

According to the PFRDA’s RFP drafting, the engagement of a consultant should not result in a principal-agent relationship between the PFRDA and the service provider for the creation of a scheme with assured returns under NPS. If a subscriber chooses a program that offers a “minimum assured return,” the scheme must be offered by a pension fund that is registered with the regulator, according to the PFRDA Act. As a result, the Pension Fund’s advisors work together to develop a ‘Minimum Assured Return’ strategy for the present and prospective subscribers.

Read More: Changes in Banking Rules: Beginning May 26, PAN or Aadhaar information will be required for cash transactions over Rs 20 lakh.

What is NPS?

The Central Government made NPS mandatory for its employees on January 1, 2004. As a result, all states implemented NPS for their workers. This scheme was made available to private-sector employees after 2009. After retirement, employees can withdraw a portion of their NPS, while the remainder can be used to purchase an annuity for regular income. Anyone between the ages of 18 and 60 is eligible for the National Pension Scheme.

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