In a big relief to Government and Corporate National Pension System (NPS) subscribers, the Pension Fund Regulatory And Development Authority (PFRDA) has decided to allow them to continue with their existing investment pattern and Pension Fund (PF) choice upon shifting to the All Citizen Sector upon leaving their employment due to resignation or retirement.
Moreover, the regulator has also decided to allow Government subscribers to continue to contribute to their NPS account seamlessly even after their superannuation without the need of submitting any request in this regard.
Why this change
The regulator observed several instances wherein subscribers under the Corporate and Government sectors were not exercising Inter Sector Shifting (ISS) after leaving their employment on account of resignation or retirement. If found that such subscribers are still associated with their erstwhile employers in NPS architecture even though they no longer work with them.
According to PFRDA, such subscribers have shown reluctance to shift to the All citizen sector, since in certain cases, the scheme/ investment option made available to the subscriber during their employment may not be available in case they shift to the All Citizen Sector. “Currently, such Inter Sector Shifting (ISS) may entail changes in PF/Investment,” the regulator observed.
In a circular dated 29th September 2022, the regular said, “it has been decided to permit such subscribers under the Government/ Corporate sector to continue with their existing investment pattern and Pension Fund (PF) choice as an option, on their shifting to All citizen sector. For such subscribers, their prospective and legacy contributions would continue to be invested as per the existing investment pattern/PF which was prevailing during their employment.”
The regulator further said that such subscribers will be free to choose any other investment pattern and PF also, rather than continuing the same investment pattern post the inter-sector shifting.
Another change for Govt subscribers
Till now, Government sector subscribers could not contribute to their NPS account post superannuation until they choose to continue their account.
“It has been decided that such subscribers under Govt sector can continue to contribute to their NPS account seamlessly even after their superannuation without the need of submitting any request in this regard,” the regulator said.
AMC, Transaction Charges
PFRDA said that Annual Maintenance Charges (AMC) and Transaction Charges of CRA for the subscribers post their resignation/retirement will be recovered from their respective PRANs from the subsequent quarter of their retirement/resignation.