Pension fund managers demand hike in commission rates

The pension fund managers under the National Pension Scheme have demanded that the fund management charges should be as high as 1 per cent of the fund.
Currently, the commission paid to them is 0.01 per cent of the fund.
There are seven active pension fund managers in the country which manages retail pension fund of Rs 700 crore.
HDFC Pension, whose corpus has increased to Rs 100 crore as of July 31 when compared to Rs 50 crore as of March 31, believes that the fund management charges must be somewhere between 0.75 and 1 per cent.
"In other pension fund markets like the US, the fund management charges to be given to the fund managers stand somewhere between 1 and 1.25 per cent. Hence, it is very much needed to increase the fund management charge for managing of the pension funds to be somewhere between 0.75 per cent and 1 per cent," HDFC Pension chief executive Sumit Shukla told PTI.

However, UTI MF, which has a separate vertical and manages pension fund, feels the fund management charges must be increased to 25 basis points.
"We have demanded that the commission to be paid to pension fund managers must be increased to 25 basis points to make it a fair number," UTI MF group president, sales and marketing, Suraj Kaeley said.
PFRDA chairman Hemant Contractor had recently said here that the regulator was in favour of hike in commission, so as to popularise the NPS, the matter was being reviewed.