New Delhi: The account maintenance charges
of the proposed low-cost pension scheme would be drastically
reduced to provide safety to people in the unorganised sector
at affordable prices, interim regulator PFRDA said.
"We are holding discussion with NSDL to bring the cost
down. The account maintenance charge would be reduced
drastically. It will be below Rs 100 from the current Rs 350,"
a Pension Fund Regulatory and Development Authority (PFRDA)
official said.
Under the present structure, a subscriber has to pay at
least Rs 470 as initial charges in the first year and Rs 350
annually to the National Securities Depository (NSDL) for
maintenance of account.
The official added that the PFRDA is negotiating on the
final price and by September 23, the exact rate would be
known.
He further said the government may bear the account
maintenance charges of the proposed low-cost pension scheme.
"The government is likely to bear the charge after PFRDA
reaches an agreement with depository NSDL on the low-cost
pension model," he added.
PFRDA has been asking the government to bear the cost of
maintaining accounts of policy holders under the New Pension
System, after it was thrown open to all citizens from May 1
this year. However, the proposal is still lying with the
government and was not even announced in the Budget.
The unorganised sector employs about 86 per cent of the
country's total worker forces.
Both the low-cost and the present model would run
separately. The subscribers will have to make their choices of
the scheme which is likely to be operational by the end of
this year.
"Some facilities in the present model might not be there
in the low-cost model. The functionality would be less in the
cheaper model," the official added.
Initially, the government launched the NPS for central
government employees joining service from January 1, 2004, and
later it was extended to all citizens from May 1, this year.
There are six fund managers for all the citizens' scheme-
IDFC Mutual Fund, Kotak Mahindra, SBI, UTI Asset Management,
ICICI Prudential Life Insurance and Reliance MF-to manage the
corpus of customers.
Besides, there are 21 PoPs of NPS, which include, State
Bank of India, ICICI Bank, IDBI Bank, Oriental Bank of
Commerce, Axis Bank and Union Bank of India.
PoPs are contact and collection points for customers
wanting to be part of the NPS.
Bureau Report
First Published: Thursday, September 10, 2009, 21:25