PFRDA to soon allow subscribers to invest up to 75% in equity

Pension fund regulator PFRDA will launch two new schemes with aggressive and conservative options of investing up to 75% of funds in equity by subscribers in a month’s time.

“We will launch two life coverage schemes with aggressive and conservation investment options in equity in a month’s time,” Pension Fund Regulatory and Development Authority (PFRDA) Chairman Hemant Contractor said.

Under aggressive investment options, the subscribers would be allowed to start with up to 75% investments of their deposits into equity which will be reduced over a period of time as their age increases, he said.

In the other option or scheme, the subscribers will start with investing 25% of their deposits into equity which will also decrease subsequently over a period of time, he added.

At present, subscribers are allowed to start with investing up to 50% of their deposits in equity, Contractor said.

The overall return on investment for PFRDA was 11.5%. The rate of return for non-government subscribers is slightly higher at 13% compared with 9.5% of government employees subscribing to the scheme.

Government employees have the option to investment up to 15% of their deposits in equity market while non- government subscribers can invest up to 50% in stocks.

Contractor said, “The proposal to allow government employees to invest up to 50% of their deposits in equity is with the government. They have not approved it so far.”