If you have not joined the National Pension System till now, take heart. Now you can enter the the lowest-cost pension product in the world till 65 years of age.
The Pension Fund Regulatory and Development Authority (PFRDA) has upped the age limit for joining the National Pension Scheme (NPS)to 65 years from the current 60. It was announced by Chairman PFRDA Hemant Contractor at a conference on "Transferring Superannuation Funds to National Pension System". "NPS is currently open for people between 18 and 60, and our Board has approved raising the age limit for joining to 65," Contractor said. "The scheme anyway has the option of continuing and making contributions up to the age of 70," he added.
Comparing NPS returns with the best in the industry, he said "Costs are important because even one per cent difference in cost over 25-30 years, makes around 15-16 per cent difference at the end because of the compounding factor. Our fund management charges are a miniscule 0.01 per cent- the lowest, when you compare others charging 0.4 or 0.5 per cent."
National Pension System offers its subscriber different options ranging from equity and secure government bonds to life-cycle funds. Equity investment of a subscriber's funds can go up to 75 per cent of their contribution if one chooses the life-cycle fund. It also offers less risky options with a heavy component of fixed income investment
As of now only 15-16% of employees in India are covered by pensions as 85 per cent of the workforce is employed in the unorganised or informal sector.