NPS schema change: rules, schedule, and other important things you need to know

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Highlights

  • There are several fund managers registered with the PFRDA to manage your funds in NPS.
  • When enrolling in the NPS plan, investors are required to choose a fund manager
  • The plan change option can be exercised twice during a fiscal year.

New Delhi: NPS offers multiple investment options – stocks, corporate bonds and government securities – to its underwriters. There are several fund managers registered with the PFRDA to manage your funds in NPS. Each fund manager or AMC has segregated funds for the above three asset classes. When enrolling in the NPS plan, investors are required to choose a fund manager and also exercise their option regarding their asset class preference. As a result, they are allocated units of the funds they select. The maximum exposure that an investor can take in equities is capped at 75%.

It should be mentioned here that NPS investors also have the option to change their fund manager and plan preference. The schema preference change request can be made online or offline through a point of presence. This option can be exercised twice during a fiscal year. To execute the schema change in offline mode, the physical application form can be downloaded from the respective websites of the Central Record Keeping Agency and a nominal transaction fee will apply in this case.

Here are the timelines and other important things investors should know:

1) Requests to change the preference of the NPS scheme are processed in T + 4 working days. Here, T implies the date of receipt of the request.

2) If the schedule preference change request is received after the end of the previous business day and before the start of the next business day, day T is taken into account for redemption and the request will be settled in T + 3 business days.

3) The repurchase will take place on D + 1 and the last NAV will be taken into account for this purpose.

4) On day T + 4, the units according to the revised “plan preference” will be credited to the subscriber’s account.

5) For example, if the request to change schema preferences is allowed on August 18 (called T, the request will be fulfilled on the next settlement day (August 20, because August 19 is a holiday) (T +1).

6). Last available net asset value (i.e. the net asset value on August 20 will be taken into account for the withdrawal of units from the subscriber’s existing funds.

7) On day T + 4 (i.e. August 25, because August 10, 21 and 22 are not working days), the units according to the new “plan preference” will be credited to the account of the ‘subscriber.


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