Pension Fund Regulatory and Development Authority (PFRDA) chairman Hemant Contractor said that the PFRDA is also pushing with the government to give the government subscribers the choice of choosing their pension fund manager
Government employees may soon be able to invest up to 50 percent of their contribution towards the pension fund into the equity market, from the current limit of 15 percent, India's pension fund regulator said here on Tuesday.
"It is under government consideration. We have sent a proposal to the government to give the government employees an option to invest up to 50 percent in equities," Pension Fund Regulatory and Development Authority (PFRDA) chairman Hemant Contractor told reporters here on the sidelines of a pension fund conference.
He said the PFRDA is also pushing with the government to give the government subscribers the choice of choosing their pension fund manager.
"Currently the government employees do not have any choice. With this they will be able to go for private fund managers to make investments into stock market," said Contractor.
The number of government subscribers currently stands at 45-46 lakh, which accounts for 44 percent of the total pension fund subscribers.
PFRDA is also looking at guidelines for allowing two percent of the government pension moneys to flow into alternative investment funds (AIFs) every year, he said.
Currently only 2 percent of private pension moneys are allowed to be invested in AIFs.
About the government's National Pension Scheme, Contractor said that in FY16 alone, NPS has added 1,18,000 subscribers, which is more than the subscribers of previous four years.
"In previous four years till March 31, 2015, NPS had 87,000 subscribers and in 2015-16 alone we have added 1,18,000 new subscribers. Tax breaker though was the kicker for NPS but along with it, many more bank branches were roped in for NPS. We expect the launch of eNPS (online NPS facility) to have contributed substantially,” he said.
The government has made 40 percent of the NPS tax-free at the time of withdrawal.
About the less successful micro-pension product Atal Pension Yojana (APY), he said that it expects to add 60-70 lakh new subscribers in FY17.
"We will be able to generate more subscribers this year. We are at 25 lakh subscribers in APY and hope to reach close to a crore in this fiscal," Contractor said.
State Bank of India is offering the APY scheme online in some of its branches to get more traction.
PFRDA has also requested the government to extend the deadline for APY, which expired on March 31, 2016, by at least a year, Contractor said.
APY is a micro-pension product with a government guarantee, which distinguishes it from other micro-pension schemes like Swavalamban Yojana. The scheme is for the informal sector so deadline should be extended by at least a year, he said.
So far 90,000 bank and post office officials have been trained for APY and as many as 20,000 post offices across the country will be engaged in promoting the scheme.
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