NPS investors can now choose up to 3 pension fund managers for different asset classes: PFRDA NPS allows an individual to invest in equities, corporate bonds, government securities and alternate asset classes. Previously, an NPS subscriber was allowed to choose only one pension fund manager
The Pension Fund Regulatory and Development Authority (PFRDA) has issued a circular stating that now National Pension System (NPS) investors can choose different pension fund managers for different asset classes. According to PFRDA’s latest circular, NPS subscribers can select a maximum of three pension fund managers for different asset classes. An individual is allowed to invest in different asset classes, i.e., equity, (E), government bonds (G), corporate bonds (c) and alternate asset class (A).In layman's terms, an NPS investor can now select a top-performing fund manager in each asset class. For instance, a subscriber can choose the HDFC Pension Fund Manager for equities, the SBI Pension Fund Manager for government securities, Kotak Pension Fund Manager for corporate bonds. Previously, this option to choose multiple pension fund managers was not available. Once the pension fund manager was selected, the money invested in the NPS in all the asset classes would be handled by that pension fund manager.
The NPS subscriber must have chosen Active choice for asset allocation instead of Auto mode to be able to use this facility.
The PFRDA circular, issued on November 22, 2023, has clarified that this facility is available for all asset classes i.e. equity, government securities and corporate bonds except for alternate asset classes (Scheme A). Further, the facility is available to existing NPS subscribers under the NPS All Citizen Model (Tier-I), NPS corporate model (Tier-I) and Tier-II (All subscribers). This means that government employees having Tier-I NPS accounts cannot avail of this facility. However, if they have a Tier-II account, then this facility can be used.
For new NPS subscribers, this option of multiple pension pension funds, the facility will be available three months after NPS registration. Under the Active mode, an NPS investor independently decides the asset allocation percentage in different classes subject to their upper limits. In Auto mode, the asset allocation is decided by the age of the NPS investor.
As per the directions issued by the pension regulator, “With the objective to further facilitate NPS subscribers with choice of multiple pension funds with multiple schemes, an additional option of pension funds selection/choice is being made available as under - The facility of selection of multiple (maximum of 03) pension funds (PF) in accordance with the asset classes (except alternate Asset class or Scheme A) is available to the existing subscribers under NPS All Citizen Model (Tier-I), NPS corporate model (Tier-I) and Tier-II (All subscribers).”
Currently, there are 10 pension fund managers which are as follows:
SBI Pension Fund Pvt. Ltd.LIC Pension Fund Pvt. Ltd.UTI Retirement Solutions Ltd.HDFC Pension Management Co. Ltd.ICICI Prudential Pension Fund Management Co. Ltd.Kotak Mahindra Pension Fund Pvt. Ltd.Aditya Birla Sunlife Pension Management LtdTata Pension Management Ltd.Max Life Pension Fund Management Ltd.Axis Pension Fund Management Ltd.Connect with Experts - Wealth creation made easy
This story originally appeared on: India Times - Author:Faqs of Insurances
