- By Aditya Pratap Singh
- Mon, 01 Jul 2024 02:27 PM (IST)
- Source:JND
New NPS Rule: With the implementation of several financial rules from July 1, 2024, major changes have also been implemented in the National Pension System (NPS) rules. The purpose of these changes is to simplify the claims settlement process. In June, the Pension Fund Regulatory and Development Authority (PFRDA) issued a circular stating that NPS subscribers will now be able to avail of the same-day settlement of their contributions.
Major changes in NPS
Under the new regulations, contributions received by the custodian bank up to 11 a.m. (T) on a given settlement day will be invested on the same day. This means that users will receive the benefit of the Net Asset Value (NAV) on the same day of making their contribution. Earlier, the settlement process followed a T+1 system, where contributions were invested the day after they were received. The shift to the T+0 system is expected to enhance transaction efficiency and simplify the investment process.
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Benefits for NPS subscribers
This change is designed to provide immediate benefits to NPS subscribers by ensuring that their contributions are invested without delay. By receiving NAV benefits on the same day, investors can see better returns and more timely growth for their retirement funds. Growth and expansion of PFRDAIn FY 2023-2024, PFRDA recorded a significant increase in the number of NPS subscribers, adding 947,000 new users from non-government sectors.
This growth has led to a 30.5% year-on-year increase in assets under management (AUM) of NPS, which now stands at Rs 11.73 lakh crore. As of May 31, 2024, the total number of NPS users is approximately 180 million.
National Pension System
The Government of India established the Pension Fund Regulatory and Development Authority (PFRDA) on October 10, 2003, and launched the National Retirement Scheme on January 1, 2004. Initially, the scheme was only available to government employees, but it has since been expanded. for all citizens. NPS is designed to provide continuous income after retirement and provide retirement benefits to investors. The implementation of same-day settlement of NPS contributions represents a significant improvement in the efficiency and effectiveness of the National Pension System. By reducing settlement time, PFRDA aims to provide a smoother investment experience for subscribers, which ultimately contributes to better financial outcomes for individuals planning for their retirement.
