Pension fund regulator PFRDA will soon allow subscribers of the National Pension System (NPS) scheme to change investment pattern as many as four times during a financial year as there has been a demand to increase the limit, its chairman Supratim Bandyopadhyay said Tuesday Currently, NPS subscribers are allowed to change the investment pattern twice in a financial year. “One can change the investment choice twice in a year. Now, in a very short period of time, we are going to increase it to four times because there are requests that you allow more number of times (to change the investment pattern),” he said, addressing a webinar on NPS scheme organised by industry body Assocham The only cautionary note PFRDA wants is that it is a long-term investment (product) to build a pension corpus, and it should not be treated akin to a mutual fund scheme, he said.

People sometimes mix it up with some mutual fund kind of thing that can give good returns. You have to give it some time and thereafter.

only you can use it (changing option). Use it judiciously, we are going to increase it to four times in a year (financial year),” Pension Fund Regulatory and Development Authority’s chairman said Subscribers are allowed to allocate their investments in a mix of instruments such as government securities, debt instruments, asset-backed and trust-structured investments, short-term debt investments, and equities and related investments Currently, pension fund managers under NPS are – ICICI Prudential Pension Funds Management Company, LIC Pension Fund, Kotak Mahindra Pension Fund, SBI Pension Fund, UTI Retirement Solutions, HDFC Pension Management Co, and Birla Sun Life Pension Management Bandyopadhyay also said the PFRDA wants to offer a variable annuity product to the subscribers after retirement, aimed at shielding them against inflation. “Once the annuity starts, that remains constant for your lifetime. Of course, there is one annuity (product) that gives a simple rise of three per cent per year but obviously, that will not take care of the risk of inflation.

We have been talking to the insurance regulator (Irdai) …and we have been talking to the annuity service providers also if they can think of this kind of variable annuity which can give some cushion against the rise of inflation, he said The PFRDA chairman said the Insurance Regulatory and Development Authority of India has made a working committee and a report has also been submitted by the committee We are in discussion with to ensure that those kinds of products are released as quickly as possible,” he added.

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