Press Information Bureau
Government of India
Ministry of Finance
12-July-2012 18:10 IST
PFRDA
Issues Revised Set of Guidelines for Registration of Pension Fund
Managers to Manage National Pension System for the Non-Governmentand
Private Sector
The
Pension Fund Regulatory and Development Authority (PFRDA) today issued a
revised set of guidelines for registration of Pension Fund Managers
(PFMs) to manage the National Pension System (NPS) for the
non-government and private sector.
The
revised guidelines, available on PFRDA’s website www.pfrda.org.in, have
done away with the earlier bidding process, wherein a pre-determined
number of slots were bid for by the PFMs, and the fees charged by them
for managing the pension funds had to be uniform for all players. The
earlier process has now been replaced by a system which lays down the
eligibility criteria for registration as PFMs, and all interested
players desiring to enter the pension industry, can register as PFMs
subject to their fulfilling the eligibility criteria. There is no
limitation on the number of PFMs. Further, the PFMs are now allowed to
prescribe their own fee charges, subject to an overall ceiling to be
laid down by PFRDA. It is expected that this would provide for an
economically viable business model for the PFMs attracting a fresh set
of entrants into the pension industry, and the resultant competition
would ensure market driven fee structures, which would work to the
advantage of the pension subscribers.
The
PFMs would also be expected to market the National Pension System (NPS)
to the potential subscribers, deciding their own marketing and
distribution channels as per their business perceptions.
It
may be recalled that the NPS has not achieved any significant progress
in the private sector, despite passage of considerable time, and these
guidelines have been awaited by the industry for quite some time. The
changes are as per the recommendations of the Bajpai Committee, set up
by PFRDA to go into the reasons for the slow progress of NPS in the
private sector. The final guidelines have been issued subsequent to
intensive discussions with all stakeholders, including existing and
potential Pension Fund Managers as also suggestions received from
pension subscribers.
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