NRIs in Gulf keen on NPS old age pension scheme
The NRI community in Gulf countries has been waiting to know the prospects of newly announced National Pension System (NPS) of India for NRIs.
The government of India established a Pension Fund Regulatory and Development Authority (PFRDA) in 2003 to develop and regulate the pension sector in the country. The National Pension System (NPS) was launched on January 1, 2004, with the objective of providing retirement income to all Indians including NRIs.
NRIs aged between 18-60 years are eligible for pension depending on the investment made. According to the PFRDA, subscribers can choose their investment mix that is generally in equity, corporate bonds or government securities, as per his/her risk appetite. The benefit subscribers ultimately receive depends on the amount of contribution, the returns made on the contributions and the period of contributions with a minimum annual contribution of Rs 6000.
This is especially of importance to NRIs living in the Gulf countries, since they don’t have mandatory social security benefits in their countries of residence, unlike in most Western countries.
The PFRDA intends to popularize its National Pensions System (NPS) product in large scale among the NRI community, especially the blue-collared workers in the Gulf region in general and Saudi Arabia – the largest country with over 30 lakh NRIs resides – in particular.
PFRDA is seeking the support of Indian missions and community organisations in the region to make the scheme success.
Speaking with this journalist on the phone, PFRDA’s deputy general manager Akhilesh Kumar said NPS is a defined contribution-based pension system in which a subscriber contributes money during his/her working or productive age to provide for his/her old age income security. He said that funds are invested by professional Pension Fund Managers in line with the investments guidelines issued by government.
The official added that NPS architecture is transparent and is web-enabled. It allows a subscriber to monitor his/her investments and returns under NPS, the choice of Pension Fund Manager and the investment option. He further explained that it allows the subscriber to switch the investment options.
He advised NRIs to approach their banks in India for subscription details and fulfilling KYC norms to subscribe into NPS.
Kumar also advised NRIs to visit www.pfrda.org.in or www.nptrust.org.in for details.
Memon A. Khader, community worker in Jeddah who has worked earlier for NRIs’ pension support schemes said: “The NRI community in the Gulf region lacks financial planning for old age and faces hurdles upon returning home.”
He said that new pension scheme will be great assurance for the retired lives of NRIs when they return home for good and he urged all concerned to make the scheme a success.
An overwhelming majority of NRIs aged above 40 years live in the Gulf countries and if they plan properly and invest in pension schemes with around SR 399 for some years, it would guarantee good returns when they reach the age of 60 years, according to him.
Suresh Bharti, a community worker in Dammam welcomed the NPS and said the NRI community in Saudi Arabia would extend every possible cooperation for it success. He also urged authorities to draw special focus upon blue collar workers of the Gulf region with their low income sources in NPS to attract their investment.
Earlier, the government of India had floated the Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) for overseas Indian workers who had Emigration Check Required (ECR) passports (mostly blue-collar workers). However, that scheme failed to draw any attention from NRIs.