PFRDA to allow online exit from NPS scheme from April 1

NEW DELHI: In a move aimed at making the exit process easier under the National Pension System (NPS), regulator PFRDA will allow subscribers to withdraw from the scheme via online mode from April 1 this year, its Chairman Hemant G Contractor said today. 

"The online exit shall be available from April 1, 2016 to facilitate the exit process. PFRDA is constantly striving to improve the risk/reward profile of the investment portfolio and...has permitted investment in REITS, INVITS, IDFs," he said at its Pension Conclave organised here.

The Pension Fund Regulatory and Development Authority ( PRFDA), over the last one year, has also spruced up the pension product, making it user friendly by introducing the online registration and contribution. 

At present, 16 banks are providing the facility and around 35 lenders are using the SBI payment gateway, which can facilitate the service to all citizens, Contractor said. 

He said efforts are required to meet the challenges facing the unorganised sector including low awareness and low income levels to save for the future. 

"An effective distribution channel with proper incentive structure would go a long way in expanding the reach of NPS among the masses. It was important to include as many people in the pension plans, so that they would not face deprivation in their old age," he said. 

HDFC Life MD & CEO Amitabh Chaudhry, whose company is one of the fund managers under NPS, said NPS penetration has not reached the desired level as expected in the country due to various reasons including low awareness, low pay packages, as well as inability to reach the untapped segment. 

"People are also not being paid enough for their work, there is just not enough money. Also, the reason why it is not selling because we are trying to attract the segment of people who have never invested in a product like this," he said. 

Chaudhry also said that there is lack of connect between the subscribers and the fund managers and it needs to be bridged. 

He also batted for tax incentives to further widen the reach of the product in the country. 

Currently, NPS has more than 1.14 crore subscribers with asset under management of more than Rs 1.09 lakh crore.

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