Pension Fund Regulatory and Development Authority will allow investment of money under the New Pension Scheme (NPS) in stock markets only through index funds in the initial years, PFRDA chairman D Swarup said. The NPS came into being in January 2004 and has so far accumulated about Rs 2,500 crore by way of contributions from government officials who joined since then.
Swarup said NPS contributions of the employees of the central government and 19 state governments would possibly be transferred to the three fund managers - State Bank, UTI Asset Management Company and LIC, by the beginning of the next financial year.
At present, employees will have only two investment choices - either investing the entire contribution in government securities or invest 15% in equities and 85% in fixed income securities. After the PFRDA Bill is passed by the Parliament - which is expected in the budget session - the regulator will allow even 50% pension money invested in equities. But in the initial years, it is proposed to restrict investment in markets through index funds and ETFs.
Swarup said NPS contributions of the employees of the central government and 19 state governments would possibly be transferred to the three fund managers - State Bank, UTI Asset Management Company and LIC, by the beginning of the next financial year.
At present, employees will have only two investment choices - either investing the entire contribution in government securities or invest 15% in equities and 85% in fixed income securities. After the PFRDA Bill is passed by the Parliament - which is expected in the budget session - the regulator will allow even 50% pension money invested in equities. But in the initial years, it is proposed to restrict investment in markets through index funds and ETFs.
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