NPS Subscribers May Soon Get To Change Investment Pattern, Says PFRDA

New Delhi: Subscribers of the National Pension Scheme (NPS) will soon get to change the investment pattern, according to the announcement by the Pension Fund Regulatory and Development Authority (PFRDA).

In an official tweet, the PFRDA chairman said it will soon allow subscribers of the NPS scheme to change the investment pattern as many as four times during a financial year as there has been a demand to increase the limit.

Subscribers of NPS to get more investment leeway@DFS_India @fpjindia #PFRDA #NPS #Investment pic.twitter.com/FFLcqx5enX

— PFRDA (@PFRDAOfficial) January 17, 2022

As of now, subscribers can change the investment pattern twice in a financial year. In December last year, PFRDA chairman Supratim Bandyopadhyay informed about the changes in NPS.

"One can change the investment choice twice in a year. Now, in a very short period of time, we are going to increase it to four times because there are requests that you allow more number of times (to change the investment pattern),” said Bandyopadhyay according to the PTI report.

However, he noted that it is a long-term investment (product) to build a pension corpus, and it should not be treated akin to a mutual fund scheme, he said.

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"People sometimes mix it up with some mutual fund kind of thing that can give good returns. You have to give it some time and thereafter, only you can use it (changing option). Use it judiciously, we are going to increase it to four times in a year (financial year)," the chairman added.

Under NPS, subscribers can allocate their investments in a mix of instruments such as government securities, debt instruments, asset-backed and trust-structured investments, short-term debt investments, and equities and related investments.

Also, subscribers can change their fund managers once a year. The fund managers invest subscribers' pension assets in the prescribed investment schemes, as per their choice.

It is to be noted that there are different rules for different sets of subscribers. For instance, government sector employees cannot have high exposure towards equities, while the corporate sector employees are allowed to allocate as much as 75 percent of the asset towards equities.