PFRDA to seek clarification on regulation of pension products

At present, different bodies look into these pension schemes; insurers' pension products, for instance, are governed by IRDAI

The Pension Fund Regulatory and Development Authority (PFRDA) has sought clarification from the government on governance of pension products. Hemant Contractor, chairman of PFRDA, said that under law, the Authority is the regulator for all types of pension schemes except that of Employees’ Provident Fund Organisation.

“Insurance companies and mutual funds also have some pension products and schemes. We have sought clarity on who would govern these since the law allows us to govern all types of pension products,” Contractor said on the sidelines of an insurance summit organised by CII.

At present, different bodies look into these pension schemes. Insurers’ pension products, for instance, are governed by the Insurance Regulatory and Development Authority of India.

Contractor said PFRDA would simplify the on-boarding process to reduce paperwork. He said that an online onboarding mechanism would be launched in the next few weeks.

“Government employees will also be given a choice to invest more in equity like private sector employees to up to 50 per cent from 15 per cent currently,” he added.

With the National Pension System (NPS) being given additional tax benefits, Contractor said it already has a corpus of Rs 94,000 crore and Rs 7,000 crore would be added this financial year. The Atal Pension Yojana (APY) has also seen good response, he said.

He added that banks engaged under APY schemes are much more than those under NPS.

The government has set a target of covering 20 million people by December-end under APY. Currently, 0.68 million lives have been covered under this.

The selection process of a new pension fund manager is being finalised. Contractor said low bids would not discourage players from applying.