This, it says, will help address the issue of declining interest rates. A committee of secretaries is looking at the request.
The Pension Fund Regulatory and Development Authority (PFRDA) wants it to be increased to 25 per cent under one scheme and 50 per cent under another. It has also sought a greater say for employees in choosing their fund managers and investment pattern.
Private sector employees are permitted investment of up to 75 per cent in equity. A few years ago, the regulator had increased the allocation of funds to equity for private employees to 50 per cent from 15 per cent. Last year, it gave more options — to invest up to 25 per cent and up to 75 per cent in equity through two schemes, called conservative life cycle and aggressive life cycle, respectively.
As many as 442,676 subscribers have opted for the NPS who invested up to 50 per cent in equity as of October 15 with assets under management (AUM) at Rs 5,166 crore.
The nascent aggressive life cycle scheme had drawn 44,160 subscribers, with AUM at Rs 249.63 crore and that of the conservative life cycle got 9,825 individuals with AUM at Rs 40.47 crore, Contractor said.
The equity schemes yielded return in the range of 9.73 per cent to 16.63 per cent as on September 20 since inception, which in most pension fund managers case is 2009.
PFRDA also wants government employees be given the choice of choosing fund managers and investment options. If approved, they could choose to invest all their NPS money in government securities or corporate bonds as well.
Currently, only three fund managers — SBI Pension Funds, LIC Pension Fund and UTI Retirement Solutions — manage NPS for the government employees. However, employees do not have discretion to choose from these fund managers and their investment options.
Private employees have four more options to choose from — ICICI PF, Reliance, Kotak and HDFC.
Contractor said that PFRDA had also approached state governments for incentives to popularise the Atal Pension Yojana (APY), a scheme for the unorganised sector. Himachal Pradesh has agreed to give Rs 2,000 a year for each subscriber, he said.
PFRDA will launch campaigns in big states on APY. It has already started doing so in Uttar Pradesh, reaching out to banks and post offices for getting subscribers, he said.
The government target is to raise the subscriber base in APY to 10 million by March 31 from 6.97 million now.