Which of the following statements is/are correct with reference to the National Pension System?
A. The NPS will no longer compel investors to convert 40% of their accumulated retirement corpus into an annuity.
B. Post-retirement, a person has to take 40% of the total corpus as an annuity as per the law’s mandate, and 60% can be commuted and taken as a lump sum.
C. Both A & B
D. None of these
Explanation:
The National Pension System (NPS) will no longer compel investors to convert 40% of their accumulated retirement corpus into an annuity, as poor yields on annuities and high inflation are translating into negative returns. Post-retirement, a person has to take 40% of the total corpus as an annuity as per the law’s mandate, and 60% can be commuted and taken as a lump sum. The Finance Ministry has announced plans to amend the PFRDA law since Budget 2019-20 and to make legislative changes to override the statutory annuitisation provision.
