In a move that will ensure more transparency in management of funds under the New Pension Scheme (NPS), the pension regulator is planning to disclose the net asset values (NAVs) of various pension plans from December 1.
“The NAVs will be uploaded on the websites of the Central Record-keeping Agency (CRA) and fund managers from December 1,” said a senior official of the Pension Fund and Regulatory Development Authority (PFRDA).
At present, neither returns nor NAVs are made public and so there is no way a subscriber can know the market value of his portfolio. The annual returns delivered by each fund manager are disclosed only to the PFRDA. The industry has been demanding that every fund manager should know the returns that others have posted.
The move assumes significance as the NPS trustee has said that fresh allocation of funds will be on the basis of the performance of the fund managers.
The NPS was opened for the unorganised sector from May 1 and has collected Rs 2.5 crore from 2,000 customers. Experts say the reason behind the slow growth of the scheme is lack of incentives to points of presence (PoPs) for selling the scheme. Sources said the PFRDA had asked the finance ministry to give incentives to PoPs.
The PFRDA is also in talks with private and public sector companies to manage their retirement corpus. “A lot of state PSUs have approached us and we are looking at their proposals,” said the official.
The regulator is also planning to launch Tier-II accounts from December 1. These accounts are flexible in terms investments and withdrawals. It expects the number of investors to go up after the introduction of Tier-II accounts.
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The PFRDA is also talking to banks and other PoPs who have internet portals to extend the online payment facility to NPS customers. It expects CRA charges to drop substantially once the number of investors reaches 1 million. The charges will go down from Rs 350 to Rs 280 after the number reaches 1 million and Rs 250 once the number reaches 3 million, say PFRDA officials.
The PFRDA is in the process of announcing a special scheme for non-governmental organisations (NGOs) and self-help groups. It is also in talks with National Securities Depository Ltd to reduce the CRA charges to Rs 5 a month for the extremely poor.
There are six fund managers for the unorganised sector under the scheme — IDFC Mutual Fund, Kotak Mahindra, SBI, UTI Asset Management, ICICI Prudential Life Insurance and Reliance MF. Besides, there are 21 PoPs, including State Bank of India, ICICI Bank, IDBI Bank, Oriental Bank of Commerce, Axis Bank and Union Bank of India.
The PFRDA Bill is expected to be presented in the winter session of Parliament. At present, the PFRDA is an interim regulator.