Supratim Bandyopadhyay, chairman,Pension Fund Regulatory and Development Authority (PFRDA), has indicated the cost structure of pension fund managers and intermediaries of the the National Pension System (NPS) was likely to change soon and much awaited requests for proposals(RFP) for pension fund managers could be out by December
"Hopefully, we will not be restricting the numbers but there will be some entry barriers to see that only very serious players should come," said Bandyopadhyay on Friday while addressing an virtual Insurance and Pensions Summit hosted by the CII .
.Currently, there are 8 pension fund managers under the NPA including SBI Pension Funds, UTI Retirement Solutions and LIC Pension Fund.
“We are doing a cost-benefit analysis and definitely very soon we will see some changes in the cost structure for pension fund managers and other intermediaries also,” said Bandyopadhyay adding that while the cost of the NPS is one of the lowest in the world and it cuts both ways,
Subscribers to NPS are currently charged 0.01% of the corpus as fund management charge.
Regarding the RFP, he said, "The RFP for pension fund managers may take about two and a half months. By December, definitely we will see the RFPs out and everybody is welcome."
Currently, the Atal Pension Yojana (APY) is attracting maximum number customers under NPS and 400,000 customers have been in the 15 days of September, bringing the total new subscribers this fiscal under APY to 2.4 million, he said.
However, the assets under management (AUM) for the APY was low at Rs 12,800 crore compared to other schemes since it is largely aimed at the unorganised sector where most subscribers opted for the Rs 1,000 per month plan,he said.
The corporate sector’s contribution to total AUM stood at a little over Rs 50,000 crore this fiscal, he said.
India has a long way to go in terms of bridging the gap between its pension coverage metrics and that of advanced countries, he said.
The country’s total pension assets to gross domestic product was only 10 per cent compared to about 100 per cent in countries like the Netherlands and Switzerland and around 80% in the US.
He explained that the NPS is a transparent, low cost, portable and well regulated product and it offered a bouquet of services as well as tax benefits.
The PFRDA chief also mentioned that it was trying to reach out to the entire population of the country in order to create pension literacy, via seminars, social media. .