Good news is coming about pension! Now you will get ‘guaranteed return’ under NPS, know government’s plan

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Big news for employees: Increase in honorarium, order issued, will get arrears of 8 months, so much money will come in the account from April
Big news for employees: Increase in honorarium, order issued, will get arrears of 8 months, so much money will come in the account from April

NPS Assured Return Scheme: PFRDA has started the appointment of consultants to make this scheme a reality. These consultants will prepare the design of this scheme.

A very wonderful scheme is coming for lakhs of pensioners of the country. Pension regulator PFRDA is about to come up with the Minimum Assured Return Scheme (MARS) under the National Pension System (NPS). Let’s know the special scheme of the government.

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PFRDA to appoint consultant
The Pension Fund Regulatory and Development Authority (PFRDA) has issued a Request for Proposal (RFP) to the consultants to design this scheme. Remind you that last year, PFRDA President Supratim Das Bandyopadhyay had said about this scheme that ‘talks are going on with pension funds and actuarial firms about this.

On the basis of this interaction, the plan will be prepared. A minimum assured return scheme is allowed under the PFRDA Act. The funds being managed under pension fund schemes are marked-to-market. Obviously, there are some ups and downs in this. Their valuation is based on the market condition.

This will be the work of consultants
As per the RFP draft of PFRDA, the appointment of a consultant should not create a principal-agent relationship between the PFRDA and the service provider for formulating a scheme with guaranteed returns under NPS. As per the instructions of the PFRDA Act, under NPS, the subscriber opting for a scheme which gives ‘minimum assured return’, such scheme will have to be offered by a pension fund registered with the regulator. In this way the advisors work by the Pension Fund to prepare a ‘Minimum Assured Return’ scheme for the existing and potential subscribers.

Such a scheme has not yet been made
PFRDA has done a lot of work in creating and adding features to the National Pension Scheme (NPS) and Atal Pension Yojana (APY), but these are all central government schemes. The scheme that PFRDA is planning to bring will be its first real scheme. This will also be special because PFRDA does not run any such guaranteed scheme till now. PFRDA says that the guarantee of this pension scheme will be market linked. Fund managers will have to decide the guaranteed portion of the return on investment.

Know what is NPS
Let us tell you that the Central Government had compulsorily implemented NPS for its employees on January 1, 2004. After this all the states adopted NPS for their employees. After the year 2009, this scheme was also opened to those working in the private sector. After retirement, employees can withdraw a part of NPS, while the rest can take annuity for regular income. Any person between 18 to 60 years can take the National Pension Scheme.

 

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