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 The earlier process has now been replaced by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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DSM/SS/GN