P.K. Tiwari in Calcutta on Friday. Picture by Kishor Roy Chowdhury

Calcutta, Sept. 11: The pension fund regulator has urged the government to offer fiscal incentives to the distributors of the New Pension Scheme (NPS) and bear the annual maintenance cost as well as the transaction charge for each subscriber.

The move comes in the wake of low investor response to NPS. Till September 4, the Pension Fund Regulatory and Development Authority (PFRDA) has received only 1,629 applications for the NPS since its launch in May.

“We have urged the government to pay the charges for central record keeping and provide incentives to distributors,” PFRDA executive director P.K. Tiwari said at a seminar organised by the Bengal Chamber of Commerce and Industry here today. However, Tiwari declined to provide any further details.

“I cannot disclose what we have suggested. But sops would be based on the number of accounts a distributor opens,” Tiwari said. The regulator met its 21 distributors in the last week of August.

“The prevalent system of financial product distribution is still based on commission, though we are trying to gradually shift to a financial advisory fee-based model,” he said.

Under the current fee structure, a distributor charges a transaction fee of Rs 40 at the time of account opening and Rs 20 for all subsequent payments.