NPS Withdrawal Timelines Shortened

Pension Fund Regulatory and Development Authority (PFRDA) intermediaries have decided to reduce the timelines of various transactions under the National Pension Scheme (NPS) to provide a better subscriber experience and fulfil their evolving needs. That said, PFRDA reduces the timeline for execution of withdrawal requests under the NPS account to a T+2 basis from a T+4 basis. 
The letter 'T' is referred to as the day of authorization of withdrawal request by the Nodal office/PoP/Subscriber. While the number '2' is the settlement days.
This means that currently, it takes the day of authorization of withdrawal request plus four days for settlement of the transaction. Now, that has been reduced to 2 settlement days, making the execution of transactions faster under the NPS account.
 In a statement, PFRDA said, "the intermediaries of PFRDA viz Central Recordkeeping Agencies (CRAs), Pension Funds (PFs) and Custodian have improved the system interface and enhanced their IT capabilities to reduce the timelines of various transactions under NPS for providing better subscriber experience to fulfil their evolving needs."
It added, "The withdrawal requests of Subscribers at the time of exit were hitherto executed on T+4 working/settlement days...and the timeline has been reduced to T+2."
The NPS account holders who will benefit from the reduction in the timeline are -- subscribers associated with Protean eGov Technologies Ltd CRA, and KFin Technologies Ltd & CAMS CRAs.
A subscriber associated with Protean eGov Technologies whose request is authorized up to 10.30 am will be settled on a T+2 basis. While the subscriber associated KFin Technologies Ltd and CAMS, if their request is authorized by 11 am, they will be settled on a T+2 basis.
It needs to be noted that the timelines are to be considered for working and settlement days.
 Subscribers associated with KFin can request authorization for activities like superannuation, premature exit, exit due to death, annuity withdrawal, Tier II withdrawal, partial withdrawal, scheme preference change, re-balancing, PFM change request, one-way switch, inter-sector change, and ERM.
While subscribers associated with CAMS can request activities like superannuation, premature exit, exit due to death, annuity withdrawal, and Tier II withdrawal.
Further, subscribers associated with Protean eGov Technologies can request authorization for transactions like superannuation, premature exit, exit due to death, family/disability pension, annuity withdrawal, Tier II withdrawal, one-way switch, and re-balance. They can also opt for scheme preference change.
‘T’ depends on the cut-off time for Settlement which varies between 10.30 am to 11.00 am, however, may change depending upon other settlement factors, it added.
 However, under a one-way switch, the subscriber has an option to transfer funds from Tier II to Tier I account, however, vice-versa is not allowed.
Also, under rebalancing, in the case of subscribers who have opted 'Auto choice' investment option, the percentage of investment in the asset classes E/C/G will change as per the subscriber's age as given in the 'Life cycle Investment Matrix'. The change happens on the date of birth of the subscriber. In this process, the existing assets, to the extent of change, are redeemed and reinvested as per the new allocation ratio.
In case of partial withdrawal, PFRDA directs that the subscriber, who has been in NPS for at least 3 years, can withdraw a maximum of 25% of the contributions made by the Subscriber (excluding returns thereof and employer contribution, if any). Partial withdrawal can be availed a maximum of three times with  the condition that the subscriber will receive a maximum of 25% of his or her own contributions made between two partial withdrawals.
PFRDA said that the reduced timelines shall be introduced in a phased manner for other activities in the interest of subscribers.



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Changes in Our Business Model
25th Sept 2020
Greetings from Moneylife Advisory Services
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
What remains the same:
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What changes:
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Over the next few weeks our site and our communication to you will reflect these and other additional changes.
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
Debashis Basu