NEW DELHI: The minimum assured pension return scheme, which the pension regulator is working on, is unlikely to be launched in the current financial year. Chairman of Pension Fund Regulatory and Development Authority (PFRDA) Deepak Mohanty told this newspaper that the modalities are being discussed and it is difficult to finalize them in the current fiscal and hence it is unlikely to be launched this year.
“There is a process to be followed. It has not come to a stage that it can be taken up to the board and discussed. Options are being considered by the experts involved. The scheme has a cost, so after managing the cost and risk, the product has to be designed,” said Mohanty. The PFRDA chairman also said that the regulator is also facilitating the formation of Association of Pension Funds on the lines of the Association of Mutual Funds in India (AMFI).
A formal announcement is likely to be made this financial year, the chairman said. “PFRDA is hand holding the pension funds to come under one roof and make their own association like mutual fund association. The setting up of the pension fund association is at an advanced stage. Hopefully this will see the light of the day this financial year.
These pension funds will have better traction with this regulator as they can raise the issues before PFRDA collectively,” Mohanty added. Meanwhile, he also said that the regulator is expecting nearly 13 lakh new subscribers to join NPS this year. “So far, 4.4 lakh subscribers including corporate employees have joined till November-end. We see seasonality in the last quarter of the current fiscal. Year-on-year, 8.5% growth is there,” the Chairman said.
When asked about the reason for fewer new subscribers, Mohanty said there is a lack of awareness among people and they give preference to other schemes like Employee Provident Fund (EPF). Besides this, he also said that 10 fund managers are engaged with PFRDA for NPS and one new DSP Pension Fund Managers Pvt Ltd has been brought on board which is trying to set up its system. The total asset under management (AUM) crossed Rs 10.6 lakh crore under NPS and Atal Pension Yojana (APY) this year. Mohanty said that the regulator is targeting Rs 12 lakh crore for this year. However, he added that achieving the target would be dependent upon the market conditions.
