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You may soon be able to invest your pension in stocks: report

If you are a member of National Pension Scheme then it might come as a good news for you that the government has reportedly allowed to invest up to 75 per cent of your money in the stock markets.

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You may soon be able to invest your pension in stocks: report
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If you are a member of National Pension Scheme then it might come as a good news for you that the government has reportedly allowed to invest up to 75 per cent of your money in the stock markets. "We are pressing the government to increase the equity proportion for government employees, and expect a favorable response very soon," from the Finance Ministry, Hemant Contractor, chairman of the Pension Fund Regulatory and Development Authority, said in an interview to Bloomberg.  

He also informed that the Pension Fund Regulatory and Development Authority (PFRDA), along with India's insurance and securities regulators, is pursuing the new code. Contractor has been heading the regulatory body since 2014. 

"The new code will help improve the professionalism of business management, with challenges ranging from the misuse of corporate funds to boards taking insufficient action when things go wrong", the publication quoted him as saying. 

Government employees contribute about 87 per cent of the Rs 2.3 lakh crore ($35 billion) overseen by the NPS

Meanwhile, with the equity market turning volatile and government securities having a roller-coaster ride of late, gold has once again proved its safe-haven credential. As the precious metal increasingly becomes mainstream through progressive initiatives of the government, the World Gold Council is pitching gold as a permissible asset class in National Pension System (NPS) which is regulated by PFRDA.

Gold is a proven source of long-term returns, a diversifier that can mitigate losses in times of market stress, a liquid asset with no credit risk that has outperformed fiat currencies, and a means to enhance overall portfolio performance. However, gold investments are not permitted by pensions regulator PFRDA at present. It allows investments in equity, corporate bond, government debt and others like alternative investment funds (AIFs), real estate investment trusts (REITs) etc.

"Gold should be permitted as a mainstream asset class in National Pension Scheme (NPS) regulated by PFRDA as it has potential to enhance returns of a portfolio. Our research shows that expansion of wealth is one of the important drivers of gold demand over the long run. Gold's long-term returns have been comparable to stocks and higher than bonds and commodities," Somasundaram PR, managing director, India, World Gold Council told DNA Money.

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