PFRDA has changed the rules to make it more attractive for subscribers to join the scheme even after the age of 65 to invest in the National Pension System (NPS). Under this, the Pension and Regulatory and Development Authority (PFRDA) allows people aged 65 years and above to allocate up to 50 per cent of the funds in equity after joining the scheme.
In addition, the rules for exiting have been simplified. PFRDA has changed the entry and exit rules of the scheme after raising the maximum age for joining NPS from 65 to 70 years. The age limit for admission in this scheme has been increased from 18 to 65 years to 18 to 70 years.
A circular issued by the PFRDA on the revised rules states that any Indian citizen between the ages of 65 and 70 or a foreign national in India can join the NPS and invest up to the age of 75 years. According to the authority, customers who have closed their accounts can also open new accounts under the new rules.
The subscriber, joining NPS beyond the age of 65 years, can exercise the choice of PF (pension fund) and asset allocation with the maximum equity exposure of 15 per cent and 50 per cent under Auto and Active Choice, respectively.
An NPS subscriber has the freedom to allocate his/her contributions to different asset classes through 'Active Choice' or 'Auto Choice'. Under 'Active Choice', a subscriber has more say on the allocation of funds across asset classes, while in 'Auto Choice' the funds get invested in pre-determined proportion as per the age of the subscribers.