"Partial withdrawals will now be allowed to National Pension System (NPS) subscribers who wish to improve their employability or acquire new skills by pursuing higher education/ acquiring professional and technical qualifications," the PFRDA said in a statement. At present, NPS and Atal Pension Yojna (APY), both regulated by the PFRDA, have a cumulative subscriber base of over 2.13 crore with total asset under management (AUM) of over Rs 2.38 lakh crore.
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NPS Withdrawal Criteria Now Includes Education. Five Things To Know
1. Partial withdrawal is allowed for the education of subscribers and also for setting up of business. The subscribers who wish to set up a new business or acquire new business will also be allowed to make partial withdrawals from their contributions. NPS is government's flagship social security programme.
2. The board also decided to increasing the cap on equity investment in 'active choice' category to 75 per cent from current 50 per cent for private sector subscribers of NPS. However, the option of increasing investment in equity will be available to subscribers till the age of 50 years.
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4. The PFRDA board also approved a proposal on changing the investment grade rating from 'AA' to 'A' for corporate bonds. "The change is subject to a cap on investments in 'rated bonds to be not more than 10 per cent of the overall corporate bond portfolio of the pension funds," it said. This initiative will enlarge the scope of investment for the fund managers while ensuring credit quality, it added. The PFRDA has taken this decision in pursuance of an announcement in the Union Budget.
5. A proposal on adoption of Common Stewardship Code, as a measure of good corporate governance, was also approved. "Further, it was also approved that the principles enumerated in such code shall be circulated to all pension funds for compliance and implementation," the PFRDA said in the release. Adoption of these Principles by Pension Funds will improve their engagement with investee companies and benefit subscribers, it added.
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