Good news for NPS subscribers! PFRDA to raise entry age limit to 70 years, exit to 75

New Delhi: Pension Funds Regulatory and Development Authority (PFRDA) is contemplating to hike the maximum age of entry into the National Pension System (NPS) from 65 years to 70 years.

The Pension fund regulator is also mulling to allow NPS subscribers who join after the age of 60 years to continue their NPS accounts till the age of 75. However, for others, the age of maturity will remain 70 years.

PFRDA is also planning to give its subscribers an option of parking 40 per cent of the corpus that is mandatory to purchase an annuity at the time of retirement with a pension fund manager to get better benefits.

As of now, subscribers having a corpus of over Rs 2 lakh at the time of retirement or attaining the age of 60 years need to buy an annuity, offered by insurance companies, on a mandatory basis. They can take out the remaining 60 per cent as a lump sum.

In other words, if a subscriber has a corpus of Rs 2 lakh or less at the time of retirement, it is not mandatory for that person to purchase an annuity as the amount comes out to be very less to be offered as a monthly pension.

Currently in the National Pension System (NPS), so long the money is getting accumulated in the corpus, post retirement at the age of 60 years, one has to pay 40 per cent of the corpus to buy an annuity and the balance 60 per cent can be taken out as a lump sum, PFRDA Chairman Supratim Bandyopadhyay said during a virtual conference.

With PTI Inputs