Pension fund regulatory body PFRDA will invest up to 2 per cent of the corpus of the private sector pension plans into alternative investment fund schemes in order to bolster the returns to subscribers.
"We are constantly looking at various ways of investment so that we can bolster the return we offer to our subscribers," PFRDA Chairman Hemant G Contractor said today.
"And after a great deal of deliberations internally and after approval by board... We will be able to invest up to 2 per cent of the corpus of the private sector pension plans in alternative investment fund. So after board approval, we are rolling it out," Contractor told reporters here.
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He said the investment will be made only in category-1 and category-2 funds regulated by SEBI.
Asked about the timing of the investment into equity market in the present scenario, Contractor said the initial cap has been put at only up to 2 per cent.
"These are highly regulated instruments and also the due diligence terms are very strict. So their money will be put into only these two types of schemes. So we have already taken due precaution", he said.
The investment of private pension corpus into these kind of funds is taken after considerations of a committee headed by former SEBI Chief G N Bajpai.
Among others, the Pension Fund Regulatory and Development Authority of India (PFRDA) is also in the process of drafting regulations to appoint retirement advisers.
"For appointment of retirement advisers, we have got suggestions on the scope and coverage of pension schemes, remuneration etc. We will incorporate the suggestions suitable to us and we hope to get it finalised in about two months", he added.
Besides, the PFRDA Chief said that it will launch Aadhaar
based model for enrolling subscribers from tomorrow.
"We have a tie up with the State Bank of India, we use their e-payment gateway. Most of the banks are members of this gateway.
"Any subscriber in a bank which has tie up with SBI e-payment gateway will be able to open the account. Most of the banks have this tie up. So we expect a large number of people to join through this Aadhaar based model because it is convenient", he said.
However, subscribers will also have the facility to join pension schemes through PAN card of bank account details.
As of February 6, 2016, subscribers under PFRDA's National Pension System (NPS) plan increased by 32 per cent to 1.15 crore. The asset under management during this period increased by 36.41 per cent to Rs 1.10 lakh crore.
PFRDA said there has been a healthy growth in number of subscribers as well as AUM in the NPS in the private sector. And as many as 2,231 corporates have registered for extending NPS benefits to their employees.
NPS is subscribed by employees of central and state governments. Besides, the private sector institutions and unorganised sectors can also avail it.
However, under Atal Pension Yojana (APY) the number of subscribers is over 2.3 lakh as of now, which is below government's expectation.
"It is a slow process, so as a strategy, we have engaged all kind of banks in our initiative to convince them. Now we have engaged 20,000 post offices as well to sell our APY. We have a diversified distribution across the length and breadth of the country, so we believe this strategy will help us join more customers under it", Contractor said.
