The Pension Fund Regulatory and Development Authority (PFRDA) is planning to have 10 million subscribers of National Pension System (NPS) in the current financial year. R V Verma, officiating chairman and whole-time member (finance) of PFRDA, said the focus would be on NPS for the private-sector and the Swavalamban Scheme, which made pension viable for small investors.
“We are looking at having more market participants for distribution of NPS. Increasing penetration of NPS in the market will be the thrust area,” said Verma. He explained that they had a total of 6.84 million subscribers as of June 7, 2014. The total assets under management (AUM) stood at Rs 56,000 crore, which was seeing month-on-month growth of eight or nine per cent. In May 2014, AUM stood at Rs 51,000 crore.
NPS is the contributory pension scheme launched by the Union government in January 2004. It was made compulsory for all new government employees. Those in all non-governmental livelihoods, including those not in any organised sector, were invited to join from 2009. To be eligible to manage private-sector NPS, the entity must be in a registered financial services business, monitored by the PFRDA, the Reserve Bank of India, the Securities and Exchange Board of India or the Insurance Regulatory and Development Authority. It also must have positive net worth (profit) and be engaged in financial business for the preceding five years.
With respect to the bidding process for private-sector NPS fund managers, Verma said they would try to finish the process within the next one to two months. “The evaluation process is underway and the committee is reviewing the proposals. We want to expedite this process for the benefit of the industry and customers.”
HDFC Life had filed a writ petition in the Delhi High Court challenging the PFRDA's rejection of HDFC Life’s bid for selection of pension fund managers. The court set aside PFRDA's decision and directed it to evaluate HDFC Life’s bid in accordance with the steps outlined in its RFP (request for proposal).
In the earlier bidding process that took place in April, sources said Reliance MF had emerged the lowest bidder at one paisa for every Rs 100 of NPS funds. In January, PFRDA had decided there would be re-bid for selection of private sector NPS fund managers, which would be valid for five years after which they would have to re-apply. Soon after, an RFP was floated for this purpose.
HDFC Pension Fund, SBI Pension Fund, LIC Pension Fund, UTI Retirement Solutions, ICICI Prudential Pension Funds, Kotak Mahindra Pension Fund, Reliance Capital Pension Fund and DSP BlackRock Pension Fund Managers have applied. There are also two new entities, Tata Mutual Fund and Birla Sun Life Insurance, who are part of this process.
“We are looking at having more market participants for distribution of NPS. Increasing penetration of NPS in the market will be the thrust area,” said Verma. He explained that they had a total of 6.84 million subscribers as of June 7, 2014. The total assets under management (AUM) stood at Rs 56,000 crore, which was seeing month-on-month growth of eight or nine per cent. In May 2014, AUM stood at Rs 51,000 crore.
NPS is the contributory pension scheme launched by the Union government in January 2004. It was made compulsory for all new government employees. Those in all non-governmental livelihoods, including those not in any organised sector, were invited to join from 2009. To be eligible to manage private-sector NPS, the entity must be in a registered financial services business, monitored by the PFRDA, the Reserve Bank of India, the Securities and Exchange Board of India or the Insurance Regulatory and Development Authority. It also must have positive net worth (profit) and be engaged in financial business for the preceding five years.
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Verma said while the number of subscribers was growing, the need was to grow faster. He said there are plans to offer tax benefits to attract customers to invest in NPS.
With respect to the bidding process for private-sector NPS fund managers, Verma said they would try to finish the process within the next one to two months. “The evaluation process is underway and the committee is reviewing the proposals. We want to expedite this process for the benefit of the industry and customers.”
HDFC Life had filed a writ petition in the Delhi High Court challenging the PFRDA's rejection of HDFC Life’s bid for selection of pension fund managers. The court set aside PFRDA's decision and directed it to evaluate HDFC Life’s bid in accordance with the steps outlined in its RFP (request for proposal).
In the earlier bidding process that took place in April, sources said Reliance MF had emerged the lowest bidder at one paisa for every Rs 100 of NPS funds. In January, PFRDA had decided there would be re-bid for selection of private sector NPS fund managers, which would be valid for five years after which they would have to re-apply. Soon after, an RFP was floated for this purpose.
HDFC Pension Fund, SBI Pension Fund, LIC Pension Fund, UTI Retirement Solutions, ICICI Prudential Pension Funds, Kotak Mahindra Pension Fund, Reliance Capital Pension Fund and DSP BlackRock Pension Fund Managers have applied. There are also two new entities, Tata Mutual Fund and Birla Sun Life Insurance, who are part of this process.