In India the pension schemes are fragmented and total contribution under various pension schemes has been less than Rs 30 lakh crore with only 12.64 crore beneficiaries.
The board of the Pension Fund Regulatory and Development Authority (PFRDA) has approved increasing the age limit for joining the National Pension System (NPS) from 65 years to 70 years with no cap on the maximum investment limit provided the sources are declared.
This would enable tax savings with contributions to the NPS to be made up to 75 years of age. The yearly investment amount is flexible with the lowest investment amount being Rs 8,000 per annum, Supratim Bandopadhyay, chairman, PFRDA, said at a session of the MCC Chambers.
Earlier the age bracket for opening an NPS account was 18 to 60 years, which was later increased to 65years.
In India the pension schemes are fragmented and total contribution under various pension schemes has been less than Rs 30 lakh crore with only 12.64 crore beneficiaries. The total deposits in various pension funds make only 14% of India’s GDP. All other countries having pension schemes, save Russia, are well ahead of India with the pension funds of the Netherlands making the highest at 191% of its GDP. Russian pension funds make only 6% of its GDP, Bandopadhyay said.
NPS, that invests mainly in four asset classes, has got the highest return from equity – 12.45%, followed by corporate bonds 10.07%, central government bonds 10% and state government bonds 9.89%. Investment in government securities has yielded 9.64%. All these have been for a period of 11 years, Bandopadhyay said.
