Retirement : Pension Regulator Comes Out with Partial Withdrawal Rules for NPS
Pension Fund Regulatory and Development Authority’s (PFRDA’s) circular on partial withdrawal  states that a subscriber, whose NPS account is at least 10 years old, can withdraw 25% of his/her contribution. However, this 25% of own contribution limit does not include the accrued income earned thereon. A limitation is that the amount can be withdrawn for only specific purposes like higher education and marriage of children and purchase/construction of residential house/flat. It also includes treatment of specified illnesses of the subscriber or his/her relatives, and accidents of a serious/life-threatening nature. A maximum of three withdrawals are allowed during the entire tenure of subscription. 
 

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Retirement : Inoperative PF Accounts To Earn Interest from 1st April

In a move that will enthuse account-holders of inoperative employees’ provident fund (EPF) accounts, the Employees’ Provident Fund Organisation (EPFO) has decided to provide interest on inoperative accounts from 1 April 2016. This will benefit over 90 million such account-holders having total deposits of over Rs32,000 crore. EPFO had stopped payment of interest to such accounts from 1 April 2011 to discourage parking of funds with EPFO in these dormant accounts. Inoperative accounts are those in which the contribution has not been received for 36 months. 

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Short-term-itis
Most investment professionals and fund managers preach that investors should not invest in equity mutual funds with a short-term outlook. However, when we analysed the monthly portfolios of equity schemes having a corpus of over Rs1,000 crore, we found that while most fund managers talk the talk, they fail to walk the walk. In our analysis of 59 equity schemes, out of the total number of stocks bought, on an average, only 8% of the stocks were held for five years or more. Just about 16% of the stocks remained in their portfolios for a period of 3-5 years and as many as 38% of the stocks were sold within a year. The high proportion of stocks sold-off within a year shows that fund managers have a totally confused investing strategy and are swayed by short-term price movements rather than staying focused on the long term. Can this short-termism affect the performance of a scheme? Or do fund investors benefit from this buying and selling? Turn to our Cover Story to find out.
 
As a corollary to our Cover Story, in our Fund Pointer section, we analyse which stocks fund managers held continuously for a period of five years or more. We find that schemes maintaining a long-term focus did well. But few have the conviction. Most of the stocks were held for the short term.
 
Fast-moving consumer goods (FMCG) companies have done very well for the past 20 years or so making enormous wealth for those who have stayed invested. However, it is time to examine whether they will deliver equally great results in the future. R Balakrishnan lists the challenges they face to sustain their high returns in future.
 
When it comes to India, the Panama Papers have been a damp squib. Maybe, Indians have their money in some other tax havens. The government has set up a committee to examine the issues; but will the revelations also lead us think about sensible tax policies, asks Sucheta in her Different Strokes column. In her Crosshairs section, Sucheta questions whether Patanjali’s breakneck expansion into biscuits and noodles is to spread Ayurveda or simply empire-building.

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