With a view to make NPS more attractive to distributors, the pension fund regulator PFRDA will soon be paying more incentives to retirement advisors (RAs).
B.S Bhandari, whole time member, PFRDA told Cafemutual that the pension fund regulator is considering hiking incentives of retirement advisors in line with the point-of-presence (POP) distributors such as banks.
Earlier this month, PFRDA has hiked the onboarding fees from Rs.125 to Rs.200 of POPs. POPs will also receive a trail incentive of Rs.50 per annum for every active account having minimum contribution of Rs. 1,000 per year.
Bhandari told Cafemutual that the pension regulator has been working on a draft circular to introduce such incentives for retirement advisors.
Currently, RAs charge a consultancy fee of 0.02% of AUM from NPS subscribers not exceeding Rs. 1000. In addition, RAs also charge an onboarding fee of up to Rs.120 per subscriber registration. RAs can also charge a fee on other services like Rs.20 for each transaction or Rs.100 annually. These charges have to be recovered directly from investors.
In another move, PFRDA has increased the upper age limit of joining the NPS scheme from 60 to 65. “The subscriber joining NPS beyond the age of 60 years will have the same choice of the pension fund as well as the investment choice as is available under the NPS for subscribers joining NPS before the age of 60 years,” the statement said.
