PFRDA sets up an expert committee to assess investment guidelines

The panel will review current investment guidelines for NPS schemes for private sector and recommend changes or new schemes

Pension fund regulator PFRDA has set up an expert committee under the chairmanship of former Sebi chairman G N Bajpai to review investment guidelines for pension system, other than for government employees, and suggest changes to make the scheme more attractive.

"After the notification of the Act in February 2014, this is the first time we are going through a wholesale review of investment guidelines in the light of experience gained so far and emerging market dynamic, including investible opportunities for the pension fund," Pension Fund Regulatory and Development Authority (PFRDA) acting chairman R V Verma told PTI.

The panel will, among other things, "review current investment guidelines for NPS schemes for private sector and recommend changes or new schemes," PFRDA said in a notification.

The six-member panel would also make recommendations on any other related issue which has a bearing on the investment pattern of New Pension System and will affect the interest of subscribers to the NPS such as active and passive management.

It has been mandated to consider and analyse different types of instruments under schemes E, C, G based on domestic and international study or experience, it said, adding that it would be based on the analysis to recommend instruments under each asset class with suitable exposure limits as appropriate.

"We are looking at making the whole pension eco-system under National Pension System (NPS) more efficient, cost-effective and market-driven with due regard to risk management and risk mitigation measures," he said.

"The purpose is to examine all the issues connected with investment guidelines, including product design, market, prudential norms, expansion of number of subscribers and the corpus," he added.

The penal which is expected to submit its report in six weeks would also look into the monitoring and supervision mechanism over pension fund manager investment portfolio.

Members of the panel are Deepak Satwalekar, former CEO and Managing Director at HDFC Standard Life Insurance Company; S B Mathur, former LIC Chairman; C R Murlidharan, former IRDA Member and Madhavi Das, Executive Director, PFRDA.

In 2010, the PFRDA had set up a committee headed by G N Bajpai and entrusted it with the task of analysing the fee structure and suggesting changes to the National Pension System (NPS).

The central government had introduced the New Pension System (NPS) in January 2004.

Initially, the New Pension System covered new entrants to central government services (excluding Armed Forces) and some state government services.

From May 1, 2009, PFRDA has extended NPS to all citizens of India, including workers of the unorganised sector.

NPS has garnered a total of 71 lakh subscribers by July 31, 2014 and is managing above Rs 58,000 crore of funds.