New Delhi: Pension fund regulator PFRDA has proposed to raise maximum entry age limit for subscribing National Pension System (NPS) to 65 years.
The entry age to NPS is now proposed to be increased to 65 years from 60 years and there is an option to continue up to age of 70 years, a finance ministry statement issued on Friday said.
NPS should also be explored, as an additional retirement benefit, for corporates where superannuation funds are not available and employees are covered only under the mandatory EPFO (Employees’ Provident Fund Organisation) schemes, Pension Fund Regulatory and Development Authority (PFRDA) chairman Hemant Contractor said.
“With opening up of economy people started getting more job opportunities, switching jobs suitable to their skills and talents. Job switching has become more frequent and people seek more controls on their finances, when they start moving jobs and place from one to another," he said.
The concept of portability came in and people started thinking about having better control on their retirement savings, he said.
Currently, NPS has more than 1.71 crore subscribers with total Asset under Management (AUM) of more than ₹ 2.04 lakh crore. Defined benefit pension schemes, which were predominant earlier, became unsustainable not only for the government sector but also for the private sector because of various factors.
A defined contribution scheme was, therefore, launched in 2004 which was initially only for central government employees, but which was later extended to state government employees and later to the private sector. This scheme is the NPS, which is regulated by PFRDA.