NPS investors will now get NVA benefits from the day of investment, rules changed

NPS News: The Pension Fund Regulatory and Development Authority (PFRDA) has announced an important change in the settlement process for National Pension System (NPS) subscribers. PFRDA has now provided the facility of same day settlement (T+0 settlement) to NPS subscribers. The advantage of this will be that if the subscriber makes his contribution by 11 am on a settlement day, then his investment will be made on the same day and he will get the benefit of the net asset value (NAV) of the same day. The new system will come into effect from July 1.

Till now, the contributions received by the trustee bank were invested the next day (T+1). That is, the contributions received today are invested tomorrow. PFRDA Point of Presence (POP) has advised the nodal offices and NPS Trusts for eNPS to follow these new timelines to ensure immediate benefits to the subscribers.

Benefits to the customer

This move of PFRDA is going to bring NPS at par with mutual funds. This will give the NPS account holder the benefit of same day NVA, which will help in growing his money. Investments made in mutual funds till 3 pm get the benefit of same day NVA. On the day when the market falls, people usually want to invest for more units. With the implementation of same day settlement in NPS, this investment option will also become attractive. This change of PFRDA will ensure that the trustee bank invests the NPS contribution received till 11 am on the same day.

EPS withdrawal rules also amended

The government has amended the withdrawal rules of the Employees' Pension Scheme, 1995. After this amendment, even the members of the Employees' Pension Scheme with less than 6 months of contributory service will be able to withdraw money from the EPS account. There are lakhs of EPS 95 scheme members in the country who leave the scheme midway despite the rule of continuously contributing to the scheme for 10 years to get pension.

Till now, only those members could avail this withdrawal benefit who had contributed for 6 months or more. In such a situation, members who left the scheme after contributing for less than six months did not get any withdrawal benefit.