Fund managers get only 0.0009% of the funds managed by them as incentives
In a move to popularise the National Pension System (NPS) in the private sector, sector regulator PFRDA said it is in talks with the government to increase incentives for fund managers.
“We are struggling and fighting with the government to increase incentivisation amount for pension fund managers,” Pension Fund Regulatory and Development Authority (PFRDA) chairman Yogesh Agarwal said at a CII meet.
Fund managers get only 0.0009% of the funds managed by them as incentives.
NPS is a government-run retirement scheme for individuals, including those in the unorganised sector.
Introduced on 1 January 2004, it is mandatory for central government employees (except armed forces personnel) appointed on or after January 2004. The scheme was made available to all citizens on a voluntary basis from 1 May 2009.
LIC Pension Fund, SBI Pension Funds and UTI Retirement Solutions are among the different fund managers for NPS.
“What is not doing well is...the non-government sector of NPS. When it (NPS) was extended to private sector from 1 May 2009, they forgot that huge marketing effort is involved and somebody has to take the onus of marketing,” he said.
Agarwal, however, exuded confidence that the pension scheme would become popular in the private sector as well, once the marketing and distribution issues of the product are addressed.
NPS has been extended to all citizens of India with effect from 1 May 2009.
NPS was made compulsory for all new entrants to central government services, except the Armed forces, from 1 January 2004. Since then, most of the state governments have also notified similar pension systems for their new entrants.
The PFRDA is yet to get statutory powers as the Pension Bill for the purpose is still pending in Parliament.
The total corpus of the government employees under NPS as on December 2011 was Rs12,769 crore. The total average monthly subscription of government employees is around Rs500 crore.
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