Contact Us - 9792276999 | 9838932888
Timing : 12:00 Noon to 20:00 PM (Mon to Fri)
Email - ssgcpl@gmail.com
|
|

Post at: Apr 25 2022

Minimum Assured Return Scheme (MARS)

Why in news

  • In feb 2022,The Pension Fund Regulatory and Development Authority(PFRDA), which operates the National Pension System, is preparing to launch a guaranteed return scheme is called Minimum Assured Return Scheme (MARS).
  • The regulator has appointed a private consultant team to help design the proposed MARS under the NPS.

(Minimum Assured Return Scheme )MARS

  • OBJECTIVE- To have a separate scheme that can offer a guaranteed minimum rate of return to NPS subscribers, especially those who are risk averse.

How it will work

  • This is going to be the market based return scheme. Any shortfall will be made good by the sponsor, and the surplus will be credited to the subscriber's account.

Two options are likely to be on offer-

  • Fixed guarantee option-The guaranteed return is fixed along the accumulation phase.
  • Floating guarantee option-The guaranteed rate of return is not fixed along the savings phase. The floating guarantee depends on the development of the 1-year interest rate until retirement.
  • The current 1-year interest rate is assigned to each annual contribution made, and is valid until retirement so that, at each point of time, there is a different minimum return.

Lock-in duration

  • As per the current plan, lock-in may be applicable on each contribution.
  • It will be applied on the basis of period since that contribution has been made.
  • It may also consider multiple lock-in period options for flexibility. Withdrawals are expected to be directly linked to lock-in period.
  • Subscriber will have the option to stay invested or withdraw after lock-in period.However, there won’t be any guarantee applied on investment after lock-in.

What is NPS?

  • The NPS was introduced by government in January 2004 (except for armed forces).
  • NPS is a voluntary, defined contribution retirement savings scheme designed to enable the subscribers to make optimum decisions regarding their future through systematic savings during their working life.
  • National Pension System Trust (NPST) established by PFRDA is the registered owner of all assets under NPS.
  • The assets under management of NPS were Rs 6,85,745 crore as on January 31, 2022 with a subscriber base of 1.53 crore.
  • NPS can be broadly classified into two categories - Government Sector (Central and state governments) and private sector (Corporates and individuals).
  • Both resident and Non-resident citizen of India in the age group of 18-65 years can join NPS, an NRI can also open an NPS account.
     


 


Comments
List view
Grid view

Current News List