Source: ET
Context:
The Pension Fund Regulatory and Development Authority (PFRDA) has announced that individual pension fund houses can now launch tailor-made investment plans, marking a potential overhaul for India’s $175 billion pension industry.
Previously, subscribers under the National Pension System (NPS) could operate only one pension program with a predefined asset allocation set by PFRDA. This limited flexibility restricted pensioners’ ability to align investments with personal goals and risk preferences.
Key Changes:
- Multiple Pension Programs Per Subscriber
- Account holders can now operate multiple pension programs simultaneously, giving greater flexibility to diversify across risk profiles and retirement goals.
- Fund houses can offer bespoke products tailored to investor preferences, moving away from uniform, regulator-defined plans.
- Expanded Personalisation & Product Innovation
- Pension managers can now design plans targeting specific customer segments, advertising a broader range of potential returns.
- Subscribers can choose investments across four asset classes:
- Equity
- Corporate debt
- Government bonds
- Alternative investment funds
- Fund managers gain flexibility to innovate within these asset classes to meet diverse investor demands.
