Millennium Post

PFRDA lists norms to protect pensioners’ NAV from mkt turmoil

PFRDA lists norms to protect pensioners’ NAV from mkt turmoil
Investments of NPS subscribers that have not been withdrawn upon superannuation will be monitised automatically and parked in separate accounts to safeguard the pensioners’ corpus from market fluctuations. Pension funds invest contribution of subscribers in the National Pension System as per the guidelines prescribed by regulator PFRDA. Subscribers have the option to choose investment instruments as well as their pension fund manager.

In a circular, Pension Fund Regulatory and Development Authority (PFRDA), while detailing norms for monitisation of units, also said the interest accrued will be credited to the subscriber accounts on annual basis. 

In case withdrawal application is not received from the subscriber within one month from the date of superannuation or attainment of 60 years, the Central Record-keeping Agency (CRA) system will “automatically initiate” a process of monetisation of units held in account of the subscribers on the last business day of the month. NSDL is the CRA.

“This involves instructions from CRA to Pension Fund Manager on monetising the entire accumulated pension wealth of the subscriber and moving into a separate withdrawals bank account held with Trustee Bank by NPS Trust. By this the NAV (Net Asset Value) is safeguarded to the extent possible,” PFRDA said. Axis Bank is the Trustee Bank under NPS.

The regulator further said nodal officer concerned and subscriber would be informed of the monetisation. The subscriber would be then asked to go for withdrawal. 

As per the norms, CRA initiates withdrawal process six months prior to his or her attaining the age of 60 or normal age of superannuation by suo motto registration of claim and allotment of a specific claim number. 
PTI

PTI

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