PFRDA suggests incentive scheme for PoPs

In order to widen the reach of the New Pension Scheme, the Pension Fund Regulatory and Development  Authority (PFRDA) has recommended the government to formulate an incentive scheme for points of presence (PoPs), or the  initial collection centres for the subscribers.

So far, the response to the NPS has been lukewarm, with subscription base from the non-government employees close to 1,500.

“Since there is no commission involved in the NPS, we have asked the government to provide monetary incentives to the PoPs, based upon criterion like the number of clients with them,” said P K Tiwari, executive director, PFRDA on the sidelines of a seminar here today.

The PRFDA has also requested the government to pick-up the administrative fee of the scheme, which includes Central Recordkeeping Agency (CRA) and PoP charges.

Under the present structure of NPS, the CRA charges constitutes opening  fee of Rs 50, annual maintenance cost of Rs 350 and charge per transaction of Rs 10. The PoP charges involve initial subscription charge of Rs 40 and each subsequent transaction charge of Rs 20.

PFRDA has asked the PoPs to prepare a business plan for increasing volumes, with the objective to popularise the scheme. As of now, there are about 21 PoPs, including banks and financial institutions, with close to 600 branches.

It is also planning a tie-up with the postal department and about 50,000 bank branches across the country for collecting funds under the NPS.

Tiwari said, the PFRDA Bill was expected to be tabled in the winter session of Parliament.

“We have also received applications from  some corporates to mange the pension funds by the  fund managers appointed under the NPS. We will have to make sure that the funds are absolutely segregated,” said Tiwari.