PFRDA to discuss with Centre proposal to hike equity exposure in NPS to 75% for govt employees
New Delhi: The Pension Fund Regulatory and Development Authority (PFRDA) on Friday said it will discuss with the Centre a proposal to raise equity exposure in NPS to up to 75 per cent for the willing government employees, as is the case with the private sector employees.
The equity exposure for the NPS subscribers from other than the government sector was increased to 75 per cent three years ago.
The investment option for government employees was eased after a lot of discussions in 2019 and became effective from April 2019, PFRDA Chairman Supratim Bandyopadhyay said at a webinar organised by Centre for Policy Research.
“Currently, they have a maximum equity exposure of 50 per cent but that too 50 per cent we call auto kind of investment. So this auto choice is nothing but it follows a lifecycle fund pattern where up to the age of 35, it will be 50 per cent in equity and balance will be going into bonds and government securities. It follows the same dictum that as the age goes up, your ability to take risk goes down,” he said.
So, he said, from 36 years onwards with every passing year, the equity component comes down and debt component rises.
“We will be in touch with the Government of India also and …(will) tell them to slowly allow other things like we have allowed 75 per cent equity exposure (for)… Private sector. So, if somebody is ready to take that kind risk and invest up to 75 per cent in equity may be allowed whether it is government sector, or private sector (employees),” he said.
Since the government investment pattern basically comes from the Government of India only PFRDA will be in touch with them, he said.
Last year, the asset under management crossed the milestone of Rs 6 lakh crore under the National Pension System (NPS) and Atal Pension Yojana (APY) after 13 years since the PFRDA came into being.
Subscribers other than government employees are allowed to allocate their investments in a mix of instruments such as government securities, debt instruments, asset-backed and trust-structured investments, short-term debt investments, and equities and related investments.
Separately, the subscribers are also allowed to change their fund managers once a year. The fund managers invest subscribers’ pension assets in the prescribed investment schemes, as per their choice. Also Read: Centre denies reports claiming CoWIN data breach, says Covid-19 information safe on digital platform
Currently, pension fund managers under NPS are ‘ICICI Prudential Pension Funds Management Company, LIC Pension Fund, Kotak Mahindra Pension Fund, SBI Pension Fund, UTI Retirement Solutions, HDFC Pension Management Co, and Birla Sun Life Pension Management. Also Read: SBI customers ALERT! UPI, internet banking, Yono services will remain impacted tomorrow, check timings
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