Pension fund regulator PFRDA to launch a guaranteed return scheme, Minimum Assured Return Scheme (MARS) under the National Pension System (NPS), which will provide an option for investments.
A Request for Proposal (RFP) to the consultants has been issued by the Pension Fund Regulatory and Development Authority (PFRDA) to design this scheme. This scheme will offer a guaranteed return to investors. The PFRDA is expected to launch the scheme before the end of the current year.
As per the RFP draft of PFRDA, the appointment of a consultant should not create a principal-agent relationship between the PFRDA and the service provider for formulating a scheme with guaranteed returns under NPS. As per the instructions of the PFRDA Act, under NPS, the subscriber opting for a scheme which gives 'minimum assured return', such scheme will have to be offered by a pension fund registered with the regulator. In this way the advisors work by the Pension Fund to prepare a 'Minimum Assured Return' scheme for the existing and potential subscribers.
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A lot of work in creating and adding features has been done by PFRDA to the National Pension Scheme (NPS) and Atal Pension Yojana (APY), which are all central government schemes. The scheme which PFRDA is planning launch is first real scheme. Also, PFRDA does not run any such guaranteed scheme till now. The guarantee of this pension scheme will be market linked. Fund managers will have to decide the guaranteed portion of the return on investment.
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About NPS
National Pension System is one such scheme, through which you can remain self-sufficient in money matters even in old age. This is a scheme of the government, gives a huge return with less risk.
The Central Government implemented NPS on January 1, 2004. After this all the states adopted NPS for their employees. Earlier, this scheme was available only for government employees. However, the government has now made it open to all the people. Any Indian citizen can take advantage of this new pension system by following some important conditions. Even if you are coming under the purview of income tax deduction, you can avoid tax by taking this scheme.
