There is good news for pensioners with the NPS Assured Return Scheme. For the first time, the PFRDA has begun this process by appointing consultants to implement the Minimum Assured Return Scheme. Let’s know the details.
There is good news for lakhs of pensioners in the country thanks to the NPS Assured Return Scheme. Actually, the pension regulator PFRDA is going to come up with the Minimum Assured Return Scheme (MARS) under the National Pension System (NPS). Let us know about this special scheme of the government.
PFRDA to appoint a consultant
The Pension Fund Regulatory and Development Authority (PFRDA) has issued a Request for Proposal (RFP) to the consultants to design the scheme. Earlier, PFRDA chairman Supratim Das Bandyopadhyay had said that “negotiations are on with pension funds and actuarial firms in this regard”.
Minimum Assured Return Scheme is allowed under the PFRDA Act. The funds being managed under pension fund schemes are mark-to-market and have some ups and downs. Their valuation is based on market conditions.
What will the consultant do?
As per the draft RFP of PFRDA, the appointment of a consultant for formulating a scheme with guaranteed returns under NPS should not create a principal-agent relationship between PFRDA and the service provider. As per the directions of the PFRDA Act, under NPS, a subscriber opting for a scheme offering ‘minimum assured returns’ will have to offer such a scheme by a pension fund registered with the regulator. In this way, the advisors work through the pension fund to formulate a ‘minimum assured return’ plan for the existing and potential clients.
Know what is NPS
On January 1, 2004, the Central Government made NPS mandatory for its employees. Following that, all states implemented NPS for their employees. After 2009, this scheme was also made available to those working in the private sector. After retirement, employees can withdraw a part of the NPS, while the rest can be taken as an annuity for regular income. Any person between the age of 18 to 60 years can take the National Pension Scheme.
