The much-awaited Minimum Assured Return Scheme (MARS) under the new pension system (NPS) will have a minimum lock-in period of 10 years. This means the subscribers will have to stay invested for a minimum of 10 years to claim the guaranteed return, reported Business Standard.
“Also, a scheme would run for 10 years only. This means that 10 years shall be minimum, as well as maximum, tenor of investments under the scheme,” Supratim Bandyopadhyay, chairman, Pension Fund Regulatory and Development Authority (PFRDA) said.
Only those investors who remain invested for 10 years will get a guaranteed return and if the actual return falls below the assured amount, pension fund managers will make up the gap.
This will be the only product to be launched under MARS, he said.
The PFRDA was supposed to be launched by the end of September. But there has been a delay because the minimum net-worth requirements for pension fund managers and the guaranteed rate of return on the scheme are yet to be worked out.
Under the current schemes, sponsors — individually or jointly — must have a net-worth of at least ₹50 crore on the last day of each of the preceding five financial years, before they make applications to the PFRDA. Of that, at least ₹25 crore should be the capital.
MARS shall be launched for the private sector. For government employees, approval from the Centre and states is needed to include it among the options of investments, Bandyopadhyay said.