Agarwal: Game plan

New Delhi, May 17: The Pension Fund and Regulatory Development Authority (PFRDA) plans to make changes in the new pension scheme (NPS) to make it more popular after it gets the Bajpai committee report by the end of this month.

The Bajpai committee, headed by former Sebi chairman G.N. Bajpai, has been entrusted with the task of analysing the fee structure and suggesting changes to the retirement scheme.

“They will have their last meeting soon and by the end of this month, I’m expecting the report,” PFRDA chairman Yogesh Agarwal said.

NPS is a defined contribution pension scheme, open to Indian citizens between the age of 18 and 55. The scheme, which was earlier restricted mostly to government employees, was opened to all in May 2009. As a result, the number of accounts covered by the scheme under the unorganised sector rose to 43,522 as on March 26 from 4,600 last year. However, the figure is still minuscule in contrast with the 17.13 lakh accounts that the scheme covers.

The PFRDA plans to inject vigour into the sagging pension sector through promotional campaigns.

The current marketing and distribution structure requires restructuring and without that the pension sector will not take off to the desired levels, Agarwal said. “So, we are waiting for the Bajpai committee report.”

At present, seven pension fund managers are managing assets of about Rs 9,000 crore. Of this, about Rs 100 crore is contributed by schemes for persons other than government employees.

These fund managers are LIC Pension Fund Ltd, SBI Pension Funds Ltd, UTI Retirement Solutions, IDFC Pension Fund Management, ICICI Prudential Pension Funds Management, Kotak Mahindra Pension Fund and Reliance Capital Pension Fund.

The PFRDA today met fund managers to review their performance. Even though NPS is considered a beneficial financial product for the unorganised sector employees, especially those who do not have a steady source of income after retirement, it has received a lukewarm response till now.