Banks Now Allowed to Sponsor NPS Pension Funds, Says PFRDA Chief

"The playing field is totally level. It is level for all sponsors. The change we have made is that we have allowed banks to become a sponsor of a pension fund. Earlier, it was only insurance companies and AMCs that could be the sponsor. So once you're a sponsor, there is no difference between any of the sponsors," Ramann told ANI.

"Banks had expressed their desire to become the sponsor and therefore we have allowed the banks to become the sponsor apart from insurance companies and AFCs," he added.

He said pension schemes such as NPS incur annual costs that must be managed.

"The only point we are making is that every pension account of a state government employee must be funded on an annual basis and therefore there is an annual expenditure that the state government must put in its income and expenditure account so that the cost of pension is born on an annual basis," he said.

He also discussed the ease of withdrawal norms for NPS Vatsalya, a scheme designed to help children benefit from the power of compounding.

Ramann explained that subscribers can now access a majority of the funds once the child reaches adulthood. "Eighty per cent of the amount of the corpus is now available for use by the citizen. And that has made a big difference to the Vatsalya account. We have made it easy for people to use the money when they need it. If they don't need the money, you continue in the NPS account," he said.

NPS Vatsalya is a contributory savings and long-term financial security scheme designed exclusively for minors.

The scheme was announced in the Union Budget for FY 2024-25 and subsequently launched on September 18, 2024, by the Union Minister for Finance and Corporate Affairs Nirmala Sitharaman.

- ANI