New Delhi: Interim pension regulator PFRDA
will launch from December this year its savings scheme, which
aims to give greater returns on the deposits, and can be
withdrawn fully.
"We have decided to launch the savings scheme from
December 1 this year. Under this scheme, the customers would
have be able to withdraw their entire savings," Pension Fund
Regulatory and Development Authority (PFRDA) Chairman D Swarup
told a news agency.
He added that returns on this scheme, known as tier II
account, "are expected to be higher due to our market-linked
investment patterns".
The essential feature of this saving account would be
liquidity. Customers needing money in emergency situations
would be able to withdraw their entire deposited sum.
However, the customers, who wants to open the Tier II
account must also have Tier 1 account and both accounts
should run separately.
"Those who wants to open the Tier II account should
essentially have Tier I account as the basis purpose of PFRDA
is to manage the pension fund," a PFRDA official said.
Tier 1 account was operational from May 1, under the New
Pension System.
Under it, a customer can only withdraw 20 per cent of the
money as a lump sum before he or she attains 60 years of age.
On attaining 60 years, the customers can withdraw 60 per cent
as lump sum.
The amount withdrawn from the savings account would be
subjected to tax as it is under exempt-exempt mode like the
Tier I account.
Under exempt-exempt, the amount is exempted from tax when
deposited and also when it accrues interest, but tax is levied
at the time of withdrawing the amount.
NPS was implemented for government employees who joined
service on or after January 1, 2004. On May 1, it was extended
to all citizens.
There are six fund managers for all citizens' scheme-IDFC
Mutual Fund, Kotak Mahindra, SBI, UTI Asset Management, ICICI
Prudential Life Insurance and Reliance MF-to manage the corpus
of customers.
Pension Fund managers are managing three separate
schemes, each investing in a different asset class. These
asset classes are equity, government securities and credit
risk-bearing fixed income instruments.
Besides, there are 21 Points of Presence (PoPs) of NPS,
which include, State Bank of India, ICICI Bank, IDBI Bank,
Oriental Bank of Commerce, Axis Bank and Union Bank of India.
PoPs are contact and collection points for customers
wanting to be part of NPS.
Bureau Report
First Published: Tuesday, September 01, 2009, 21:31