New criteria aim to
create a more economically viable model
Fund Regulatory and Development Authority (PFRDA) on Thursday issued new set of
guidelines to boost the National Pension System (NPS). The new eligibility criteria recommended by G
N Bajpai Committee are:
There will be no bidding process for
appointment of fund managers. There will not be any cap to number of pension fund
managers (PFMs) managing the retirement corpus under non-government and private
eligible company can undertake the business of fund management under the NPS.
PFMs have been given the freedom to fix their
own fees subject to an overall ceiling laid down by PFRDA. Earlier, the fund
managers charged a uniform fee.
Fund managers are also free to set up their
own marketing and distribution channel in order to attract potential
initiated by the government for public on May 1, 2009. But it failed to attract
popularity among the citizens. Currently, it has 50,000 individuals (other than
the central government employees for whom it is now mandatory) from over a 400
million workforce. PFRDA had set up the Bajpai committee in August 2010 to do an
in-depth study on the drawbacks of the scheme and recommend measures to
fast-track and popularise the retirement scheme for individuals, including
those in the informal sector under NPS.
expected that the new criteria would provide for an economically viable
business model for the PFMs attracting a fresh set of entrants into the pension
industry," said the press release issued by PFRDA.
ministry expects an increase in subscribers after these new changes in