There is news of relief and happiness for crores of people who have invested money in the National Pension System (NPS). Pension Fund Regulatory and Development Authority i.e. PFRDA has given green signal to several major reforms to make NPS more strong, reliable and investor-friendly. NPS subscribers will get the direct benefit of these changes. Be it government employees, people working in the private sector or retail investors.
Till now the scope of pension fund management in NPS was limited, but under the new decision, PFRDA has in principle given permission to banks to start pension funds also. This means that in the coming time, even big and strong banks of the country will be able to manage the money deposited under NPS. This clearly means that investors will have more options than before. If there are more options, competition will increase and if competition increases, services will be better.
Not every bank will get approval
However, this facility is not available for every bank. PFRDA has made it clear that only those banks will be able to sponsor pension funds, whose financial position is strong and which completely meet the rules of the Reserve Bank. The eligibility of the bank will be decided considering its net worth, market value and overall financial strength. Detailed terms and conditions for this will soon be issued separately, which will be applicable to both new and old pension funds.
NPS Trust Board gets new leadership
To further strengthen the governance of NPS, PFRDA has included three experienced and trusted names in the Trust Board. These include former SBI chairman Dinesh Kumar Khara, former senior officer of UTI AMC Swati Anil Kulkarni and co-founder of Digital India Foundation Arvind Gupta. Dinesh Kumar Khara has also been made the new chairperson of the NPS Trust Board. This is expected to further strengthen the money management and monitoring system of investors.
Control on fees for investors
PFRDA has also made important changes in the investment management fees of pension funds. This new fee structure will be applicable from April 1, 2026. Now different fees will be fixed for government and non-government sector investors, so that the interests of all sections can be protected. The corpus of each scheme under the multiple scheme framework will be considered separately. However, it is a matter of relief that the regulatory fee of 0.015 percent charged on pension funds will remain the same as before.
What will be the benefit to common investors?
The aim of all these reforms is to make NPS more transparent, competitive and sustainable in the long run. More pension fund options, better governance and controlled fees will have a direct impact on investors’ retirement savings. With this, government employees, people working in private jobs, self-employed and young workforce will all be able to get a more secure future in old age.
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