New Delhi. The Pension Fund Regulatory and Development Authority (PFRDA) has announced an important change in the settlement process for the National Pension System (NPS) subscribers.
PFRDA has now provided the facility of Same Day Settlement (T+0 Settlement) to NPS subscribers. The advantage of this will be that if the subscriber makes his contribution by 11 am on any settlement day, then it will be invested on the same day and the benefit of the Net Asset Value (NAV) of the same day will be available. The new system will come into effect from July 1.
Till now the contributions received by the trustee bank were invested on the next day (T+1). That is, the contributions received today are invested tomorrow. PFRDA Point of Presence (POP) has advised the nodal offices and NPS Trust for eNPS to follow these new timelines to ensure immediate benefits to the subscribers.
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Benefit to the subscriber
This move of PFRDA is going to bring NPS at par with mutual funds. With this, NPS account holders will get the benefit of same day NVA, which will help in increasing their money. Investments made in mutual funds till 3 pm get the benefit of same day NVA. People usually want to invest in more units on the day when the market falls. With the implementation of same day settlement in NPS, this investment option will also become attractive. This change by PFRDA will ensure that the trustee banks invest the NPS contributions received till 11 am on the same day.
EPS withdrawal rules also amended
The government has changed the withdrawal rules of the Employees Pension Scheme, 1995. After this amendment, the members of the Employees Pension Scheme with less than 6 months of contributory service will also be able to withdraw money from the EPS account. There are lakhs of such EPS 95 scheme members in the country who leave the scheme midway despite the rule of continuously contributing to the scheme for 10 years to get pension.
Till now, only those members who contributed for 6 months or more could avail this withdrawal benefit. In such a situation, those members who left the scheme after contributing for less than six months did not get any withdrawal benefit.
