Pension funds to be allowed to invest in assured return schemes

The union cabinet today approved the introduction of certain official amendments to the Pension Fund Regulatory and Development Authority (PFRDA) Bill, 2011 that allows the subscriber seeking minimum assured returns to opt for investing his funds in such schemes providing minimum assured returns as may be notified by the Authority.

Withdrawals not exceeding 25 per cent of the contribution made by subscriber will be permitted from the individual pension account subject to the conditions, such as, purpose, frequency and limits, as may be specified by regulations by the PFRDA.

The foreign investment ceiling in the pension sector has been fixed at ''26 per cent or such percentage as may be approved for the insurance sector, whichever is higher.''

It has been decided to establish a Pension Advisory Committee with representation from all major stakeholders to advise PFRDA on important matters of framing of regulations under the PFRDA Act.

Membership of the PFRDA will be confined to professionals having expertise in economics, finance or law.

The New Pension Scheme (NPS) has been made mandatory for all central government employees (except armed forces) entering service with effect from 1 January 2004.