The Pension Fund Regulatory and Development Authority (PFRDA) has announced an increase in the upper age limit for joining the National Pension Scheme (NPS) to 65 years, from the current 60.
PFRDA chairman Hemant Contractor made the announcement at a conference on "Transferring Superannuation Funds to National Pension System", in New Delhi on Monday. He said the board of the pension regulator has already approved the change and it would soon notify these.
"NPS is currently open for people between 18 and 60, and our board has approved raising the age limit for joining to 65," Contractor said.
"The scheme anyway has the option of continuing and making contributions up to the age of 70," he added.
Contractor also said the government is in the process of reforming pension schemes to facilitate ''portability'' or transferability of funds and make NPS more attractive to investors
"The aim is to open up pensions to sectors that are without pensions," he said, pointing out that only 15-16 per cent of employees in India are covered by pensions as an overwhelming 85 per cent of the workforce is found in the unorganised or "informal" sector.
Elaborating on the benefits of the NPS, Contractor said it is the "lowest-cost pension product in the world today".
"Costs are important because even one percent difference in cost over 25-30 years, makes around 15-16 per cent difference at the end because of the compounding factor."
"Our fund management charges are a miniscule 0.01 per cent... the lowest, when you compare others charging 0.4 or 0.5 per cent," he said, adding that the NPS returns compare with the "best in the industry".