Pension regulator to hire agency

Fees on the National Pension Scheme could come down to make it more attractive to subscribers if the Pension Funds Regulatory and Development Authority’s (PFRDA) plans go through.

PFRDA chairman Hemant Contractor said that they could not charge higher fees on the pension clients like it done for insurance and mutual fund products.

“We are trying to bring down the initial costs and make the pension products attractive to subscribers,” he said.

The authority wants to extend the distribution channels of the National Pension Scheme, which covers only one crore people through the post offices and the banking system, by bringing in trained retirement advisors as a measure to boost patronage for pension funds.

The Pension Scheme notification which was issued in December will be operational in a month.

There are several new schemes that PFRDA has on its agenda and is talking to the government about the possibility of introducing inflation indexed instruments in which NPS can invest.

It is also planning to bring in more fund managers under its fold and the request for proposal has already been floated.

The e-NPS introduce in December 2015, whereby investors could subscribe to the NPS online with the help of Aadhaar or PAN card details has met with good response.

“Ideally NPS should cover at least 14-15 crore people in the country of 1.3 billion population,” said Joydeep Roy, partner & leader, insurance & allied businesses, India of PricewaterhouseCoopers, to bring down the burden on the government for running the scheme in a study released at a recent CII meet.

The government has introduced NPS to reduce the burden on its expenditure based on defined benefits returns earlier.

It spends around 2.4 per cent of the GDP, which is expected to cross 4 per cent in 2030.