The
Cabinet is likely to approve three amendments proposed in the Pension
Fund Regulatory Development Authority (PFRDA) Bill, the law relate to
New Pension Scheme (NPS). Central Government Employees who joined in
Government Service on or after 01.01.2004 are under NPS. This pension
scheme has also been extended to all Indian Citizens.
Regulatory Development Authority (PFRDA) Bill. According to reports, three changes are being made to PFRDA Bill.
- The first amendment will reportedly allow contributor to withdraw funds from the pension scheme in case of an emergency. The present law does not provide for withdrawing funds for emergency purposes from NPS.
- Also, the subscriber will be reportedly given a minimal assured return for the investment in his fund. Since NPS is market related there is no minimum return assurance so far.
- The third amendment reportedly says there will be a 26 per cent cap on the Foreign Direct Investment (FDI) in the scheme. Earlier, the cap was not specified. The BJP has been demanding the FDI cap of 26 per cent to be included in the PFRDA Bill.
The
pension bill or the PFRDA Bill suggests changes to how savings of
nearly 25 lakh Indians are invested. Currently, these savings are
invested in government securities that offer a fixed rate of return. The
new bill allows pension funds flexibility on appointing a professional
fund management company and lays down roles and responsibilities.
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