An NPS Tier 1 account, backed by the Indian government, builds a retirement corpus through locked-in contributions until age 60, with limited early withdrawal options.
The choice of pension fund managers has also broadened. Now, there are 10 pension fund managers to choose from. NPS investors are also allowed to switch their pension fund once in a year. From this year onwards, the PFRDA has allowed investors to spread their investments across three different pension fund managers. ET Wealth identifies the best performing NPS funds to help investors decide which pension fund manager they should go with.
More pension fund managers, higher fees on the anvil for NPS subscribers
Pension fund regulator PFRDA floats request for proposals (RFP) for new pension fund managers. Moneycontrol PF Team December 23, 2020 / 09:46 PM IST
The Pension Fund Regulatory and Development Authority (PFRDA) has proposed four charge slabs linked to assets under management (AUM). This is part of its request for proposal (RFP) floated on December 23, inviting applications from prospective sponsors for pension funds under the NPS.
The investment management fee can be a maximum of 0.09 percent for AUM up to Rs 10,000 crore, and 0.06 percent for AUM between Rs 10,001 crore and Rs 50,000 crore (see table). Beyond Rs 1.5 lakh crore, the charge will be 0.03 percent, which is also the lower cap. That is, when the prospective sponsors for pension funds submit their bids, the investment management fee quoted cannot be lower than 0.03 percent in any of the slabs.