PFRDA sets up panel to overhaul National Pension System

The Pension Fund Regulatory and Development Authority (PFRDA) has set up a committee headed by former Sebi chairman G N Bajpai to overhaul the structure of pension scheme thrown open to all citizens as it failed to pick up.

"The National Pension System (NPS) has not proved to be as popular as was envisaged under the original vision...The committee will investigate the underlying causes for this tenuous beginning and suggest the remedial steps required to make NPS a viable pension system for all stakeholders," the interim pension regulator said in a notification.

Besides Bajpai, the members of the committee are Former HDFC Standard Life MD Deepak Satwalekar, IIM Ahmedabad Professor Abhinandan Jain, ICICI Foundation President Nachiket Mor.

 

PFRDA Executive Director P K Tiwari is the member secretary of the committee.

Initially, the government launched the New Pension System for central government employees joining service from January 1, 2004, but it was extended to all citizens from May 1, 2009.

However, the citizen pension scheme received a lukewarm response and only around 8,000 subscribers joined the scheme in 14 months.

The committee will look if there is a need to alter the present incentive structure of various stakeholders, and to suggest a viable economic incentive model.

It will also examine whether it is desirable to have differentiated incentive structures for the government and non-government segments.

"The committee will examine the total cost structure of NPS, in comparison to international or domestic best practices," it said.

Besides, the committee would assess the desirability of including additional Pension Fund Managers (PFM). Currently, there are six fund managers.

"The committee is also requested to suggest a suitable revenue earning model for PFRDA, with a view to make its finances self-sufficient on a sustainable basis," the notification said.

It further said the committee would recommend the name of stakeholder or group of stakeholders, which could market or popularise the NPS.