Supratim Bandyopadhyay, Chairman,PFRDA
On launching of the Minimum Assured Return Scheme (MARS) under the National Pension System (NPS), PFRDA Chairman Supratim Bandyopadhyay said the board is considering it and hopefully in the next 7-10 days, approvals can take place.
Mumbai:
With old pension scheme(OPS), where government employees receive 50 per cent of last drawn basic pay as pension based on defined benefit( DB) scheme, emerging as a major political issue, the ministry of finance has asked pension fund regulator PFRDA that operates National Pension Scheme(NPS)based on defined contributions(DC), to examine how NPS can offer pension that can match OPS system.
Officials at the PFRDA confirmed that there have been exchanges of notes and ideas between MoF and them about necessary steps that can be taken so that the government employees who are currently part of NPS can receive pension that would be possible under OPS system.
Analysts pointed out that with the issue of OPS which was part of the election manifesto and helped the Congress Party to win power in Himachal Pradesh, MoF is expecting issue of bringing back OPS for the government employees to play major role in all future elections and is keen to do something within the NPS framework that can ensure a pension which is equivalent of 50 per cent of last drawn basic salary of a government employee.
“May be the government can provide more funds to the NPS which can be invested and returns can be added to improve the existing pension amount that are being offered to the government employees under the NPS system.
The state government of Jharkand, Chhattishgard and Rajasthan have already intimated to the PFRDA that they would not continue with NPS and want the funds back that have gathered after they joined NPS.
These states have already taken decisions to revert back to the non-contributory defined benefit old pension scheme (OPS) from April 2022, from reform-oriented contributory NPS.
On the state government’s demand for the accumulated corpus under NPS, PFRDA Chairman Supratim Bandyopadhyay said the regulation under PFRDA does not allow it.
.Meanwhile, PFRDA on Friday said the asset under management is likely to be around Rs 9 lakh crore this financial year due to market volatility.
”Earlier, we were looking at an AUM of over Rs 10 lakh crore, however, due to the Russia-Ukraine war and other geopolitical scenarios the market was volatile and we are hoping to be over Rs 9 lakh crore,” told reporters.
There has been an increase in fresh funds to Rs 1 lakh crore as of December 2022 compared to Rs 1.3 lakh crore in the previous fiscal and it is expected that there will a total flow of Rs 1,5 lakh crore crore into the NPS system.
As of December 2022, the number of subscribers for the National Pension Scheme (NPS) and Atal Pension Yojana (APY) grew by 24.62 per cent to 606.07 lakh from 486.35 lakh in January 2022.
According to PFRDA data, the net invested contribution as on December 31, 2022, from the central government grew to Rs 1.65 lakh crore from Rs 1.37 lakh crore on January 1, 2022, states rose to Rs 3.24 lakh crore from Rs 2.52 lakh crore and corporate increased to Rs 84,878.13 crore from Rs 61,067.43 crore.
When asked about the launching of the Minimum Assured Return Scheme (MARS) under the National Pension System (NPS), Bandyopadhyay said the product was presented to the board and the structure is given to them.
”The board is considering it and hopefully in the next 7-10 days, we will have the approval. Once we have the approval we will notify,” he added.