PFRDA Plans New NPS Accounts On-boarding Through Online Platform
In modern India where every business is hitting the cloud, PFRDA doesn’t want to stay behind. PFRDA – the regulator of Pension funds in India has announced the launching of an online platform that will allow people (those who are willing) to open new accounts under National Pension Scheme (NPS) directly from the online platform. It is very much like registering for a new service by creating a new account.
Hemant Contractor, chairman of PFRDA said, “We are about to launch an online platform which will allow potential customers to register new accounts under NPS using the website”. “We are talking with the government about the prospect of providing tax benefits on pension schemes, similar to those of insurance of mutual funds schemes so that pension products gain popularity among people employed in unorganized sectors,” Hemant added.
The chairman made these comments during an insurance summit that was organized by CII or Confederation of Indian Industry. The summit was held on 21st August, 2015.
“We have requested the present government to make clear whether PFRDA has the authority of regulating pension products or not because, according to PFRDA Act of India, we have do have the power of regulating all pension products,” said Hemant Contractors. “Currently life insurers and houses controlling mutual funds are successfully running the pension business,” the Chairman added.
When asked about Employees Provident Fund Organization, Hemant said, “EPFO is managing pension business in India as of now and it is government’s call to make whether EPFO will managed pension or whether PFRDA will”.
Speaking about new pension accounts that have been opened under Atal Pension Yojana, Hemant said, “So far, in last two months, PFRDA has opened 6,80,000 pension accounts under the Yojana and we are looking forward to ramp it up to 2 crores by end of this calendar year”. “65% of the accounts opened so far are of urban origin while the remaining 35% are of rural origin,” Contractor added.
As of now, LIC Pension Fund, State Bank of India and Unit Trust of India are the three fund managers that are managing all funds collected under the Atal Pension Yojana. All these three fund managers are owned by the state.
PFRDA is gearing up for introducing new fund managers in addition to 7 active managers currently managing NPS. In addition to that charges for fund management are also under review. Contractor said, “Today, total NPS fund is standing at 94,000 crores with Atal Pension Yojana contributing 7,000 crores in the total corpus.” “We are not shy of increasing commission rates for distributors and fund managers because NPS needs to spread,” he added.
“Currently we are planning on increasing fund managers’ tenure to 5 years from existing 3-year term and soon we will be rolling out proposal request for additional fund managers,” Contractor said. According to him, the new proposal request will be issued within coming 30 days.