 "PFRDA aims to strengthen its bases")
Hemant Contractor, chairman, PFRDA, said the last time it was a pure L1 method of selecting new pension fund managers. “This time we are going for a differential pricing mechanism. We hope to select a maximum of 10 new pension fund managers and their licences will be valid for five years,” he said.
The commercial bids of the qualifying bidders will be ranked and those bidders who have been ranked from L1 to L10 will be considered for further selection, provided at least one pension fund is a government company.
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These selected pension funds will be allowed to operate at the bid price subject to the ceiling set by the PFRDA.
All the eligible bids will be ranked from L1 to L10 based on the price quoted in the commercial proposal, which will be less than or equal to 0.10 per cent per annum.
In an earlier bidding, the lowest bid quoted was one paisa for every Rs 100 of National Pension System (NPS) funds, and others were required to match it. Some players said the bid would not make business sense for companies operating in this space.
The NPS corpus has grown to Rs 1.45 lakh crore and the number of subscribers is 13.8 million. Contractor said there had been a growth in the number of corporate subscribers in this year.The NPS is a voluntary, defined contribution retirement savings scheme.
“Not only have we eased the process of joining NPS through the online mode, the returns have been good. Further, the exclusive tax benefit of Rs 50,000 for NPS subscribers has made the product attractive,” Contractor added.
The PFRDA is also trying to strengthen the NPS distribution mechanism. Contractor said this would help accelerate the pace of growth.
“We rely a lot on banks, post offices and non-banking financial companies for customers. Now we have asked then to step up efforts to reach out to more customers,” he said.
The PFRDA will also in the next few weeks issue clarifications on the foreign holding allowed in pension fund managers.