New Delhi, Feb. 5: The Pension Fund Regulatory and Development Authority (PFRDA) today said the central record-keeping agency (CRA) and fund managers for the Rs 1,500 crore collected under the new pension scheme (NPS) would be in place in the next three months.
“The CRA will be appointed next month and then the pension fund managers will also be on board. However, both will be taken in from the public sector since the scheme is restricted to government employees,” PFRDA chairman D. Swarup said.
Tomorrow is the last day for public sector data management institutions to submit their expressions of interest (EoI) for managing the database. When asked to name the institutions, he said, “Both the National Securities Depository Ltd and Central Securities Depository Ltd are eligible.”
Swarup was speaking on the sidelines of a seminar organised by industry chamber Assocham.
According to the regulator, the corpus is expected to grow by Rs 700-800 crore each year over the next few years.
Last month, the finance ministry issued an executive order to empower the PFRDA to appoint a CRA and pension fund managers to cover central and 19 state governments employees under the NPS.
The government introduced the scheme for all central government employees who joined from January 1, 2004 onwards. It is estimated that under the NPS, India’s pension fund will grow to $43 billion in the next 10 years.
According to the regulator’s estimates, if the corpus would have been invested in equities and corporate bonds, it would have grown between 14 per cent and 29 per cent by now, against the 8 per cent investors are getting now.
The regulator also said, “I am confident that a favourable tax treatment will be given to such long-term savings. We would like it to be EEE during the withdrawal stage and are building the case for it before the government.”
However, in the absence of new pension schemes, total fiscal stress both on central and state governments would increase to Rs 1,60,000 crore from Rs 75,000 crore per annum, said the regulator.
Meanwhile, speaking on the issue of delay in the passage of the PFRDA bill, Swarup said, “There is a small section of the UPA who is supporting the government from outside but has objections to the NPS. Except for the Left party, the 19 states as well as the Opposition want the bill to be passed”.