NPS Tier 2 Operational Guidelines Update | TTS
The National Pension Scheme Tier II- Tax Saver Scheme, 2020 (NPS-TTS) has undergone some changes in its operational guidelines. These changes have been put in place to better serve the needs of taxpayers who are investing in this scheme. The new guidelines include updates to the tax-saving benefits offered by the scheme and changes to the way in which contributions are managed. These changes are designed to make the scheme more accessible and beneficial to those who choose to invest in it.
Pension Fund Regulatory And Development Authority
Date: 30th November 2021
CEOs of All Pension Funds
SUBJECT: Change in Operational Guidelines for National Pension Scheme Tier II- Tax Saver Scheme, 2020 (NPS – TTS) -reg.
Reference is invited to the Operational Guidelines for National Pension Scheme Tier II- Tax Saver Scheme, 2020 (NPS – TTS) issued vide File No. PERDA/10/01/1/0003/2018-PDES dated 17th August 2020.
2. In partial modification to the above ‘mentioned guidelines, it has been decided by the Authority to make the following change:
Particulars: Investment Choice & Pattern
Existing guideline/provision: Investment limit: Cash/ Money Market/ Liquid MFs – Upto 5%
Revised guideline/provision: Investment limit: Cash/Money Market/ Liquid MFs – Upto 10%
3. Further, the above exposure norm shall not be applicable till the scheme corpus is below Rs. 5 Crores.
4. Subject to the aforementioned revision, all other terms and conditions as contained in the aforementioned guidelines shall remain unchanged. All Pension funds are called upon to note these changes and ensure necessary compliance.
5. This circular is issued in exercise of powers of the Authority under Sub-clause (b) of sub-section (2) of Section 14 read with Section 23 of the PFRDA Act, 2013 and sub-regulation (1) of Regulation 14 of PEFRDA (Pension Fund) Regulations, 2015 as amended from time to time.
6. The revision shall be effective from the date of this circular.
(A. K. Soni)
What is the change in the investment limit for Cash/ Money Market/ Liquid MFs in NPS Tier 2?
The existing guideline stated an investment limit of up to 5% for Cash/ Money Market/ Liquid MFs in NPS Tier 2. The revised guideline now allows an investment limit of up to 10%
Why was the investment limit increased for Cash/ Money Market/ Liquid MFs in NPS Tier 2?
The change in the operational guidelines aims to provide more flexibility and options for NPS Tier 2 investors by increasing the investment limit for Cash/ Money Market/ Liquid MFs.
How does this change affect NPS Tier 2 investors?
NPS Tier 2 investors can now allocate a higher percentage of their investments to Cash/ Money Market/ Liquid MFs, which may be beneficial for those seeking lower-risk options or short-term liquidity.
Are there any other changes to the operational guidelines for NPS Tier 2?
The change in investment limit for Cash/ Money Market/ Liquid MFs is the only update to the operational guidelines for NPS Tier 2 mentioned at this time.
When does this change in the operational guidelines come into effect?
The revised guideline allowing an investment limit of up to 10% for Cash/ Money Market/ Liquid MFs in NPS Tier 2 is effective immediately.