The Pension Fund Regulatory and Development Authority (PFRDA) on Monday revised the charges to be taken from private sector subscribers under the New Pension Scheme (NPS).
A first-time subscriber is to be charged Rs 100 for registration and a transaction charge of 0.25 per cent of the initial contribution amount. This ad valorem transaction charge is subject to a minimum of Rs 20 and a maximum of Rs 25,000. In any subsequent transaction involving a contribution upload, the NPS subscriber would be charged 0.25 per cent of the amount subscribed, subject to a minimum of Rs 20 and a maximum of Rs 25,000.
At present, the charge is a flat rate of Rs 20 for the initial subscriber registration and Rs 20 for any contribution upload.
This revision is based on the Bajpai committee's recommendation, which advised a higher commission structure to incentivise points of presence (PoPs), the term for the entities which implement the processes. “The Bajpai committee had observed that a flat rate structure amounts to the poor subsidising the rich, and a more equitable structure would be charging of fees on an ad valorem basis. The above structure is applicable to both individuals and corporates in the private sector, and is expected to sufficiently incentivise the PoPs to actively participate in the opening of NPS accounts and also provide better services to account holders,” PFRDA said.
