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Context:

• Pension Fund Regulatory and Development Authority (PFRDA), is preparing to launch a guaranteed return scheme, Minimum Assured Return Scheme (MARS).
• MARS will provide savers and people from the salaried class an option for their investments.

About MARS:

• This will be the first scheme from the pension regulator that will offer a guaranteed return to investors.
• The actual returns under the scheme will depend on the market conditions. Any shortfall will be made good by the sponsor, and the surplus will be credited to the subscribers’ account.
• Two options are likely to be on offer.

1. Under the fixed guarantee option, the guaranteed return is fixed along the accumulation phase.
2. Under the floating guarantee option, the guaranteed rate of return is not fixed along the savings phase. The floating guarantee depends on the development of the 1-year interest rate until retirement.

Pension Fund Regulatory and Development Authority;

• Pension Fund Regulatory and Development Authority (PFRDA) is a statutory regulatory body set up under PFRDA Act enacted on 01.02.2014 .
• It is under the jurisdiction of Ministry of Finance .
• It has an objective to promote old age income security and protect the interests of Nationla Pension System subscribers.
• The PFRDA is ensuring the orderly growth and development of pension market.
• Composition: The Authority consists of a Chairperson and not more than six members, of whom at least three shall be whole-time members, to be appointed by the Central Government.

NPS:

• National Pension System Trust (NPS Trust) is a specialized division of Pension Fund Regulatory and Development Authority.
• National Pension System, that includes Public Provident Fund (PPF) and EPF (Employees' Provident Fund) is an EEE (Exempt-Exempt-Exempt) instrument in India where the entire corpus escapes tax at maturity and entire pension withdrawal amount is tax-free.
• In 2021, PFRDA increased the entry age for the National Pension System (NPS) from 65 years to 70 years. As per the revised norms, any Indian Citizen, resident or non-resident and Overseas Citizen of India (OCI) between the age of 65–70 years can join NPS and continue or defer their NPS Account up to the age of 75 years.
• In 2018, the Government of India made NPS an entirely tax-free instrument in India where the entire corpus escapes tax at maturity.
• NPS extends to all citizens of India including workers of the unorganized sector on a voluntary basis with effect from 2009.
• In 2015 the Reserve Bank of India allowed Non-Resident Indians (NRI) to subscribe to NPS.

https://indianexpress.com/article/explained/explained-pfrdas-guaranteed-return-scheme-another-option-for-savers-salaried-class-7795162/

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