The ‘New’ NPS
- Measure: Improve incentives for distributors. Has been recently implemented.
- Impact: Was required. But won’t be enough, need consumer education to build volumes.
- Proposal: Increase fund management fees with an option to lower later.
- Impact: Under consideration. But finance ministry unhappy with increase in costs.
- Proposal: Relax the norms to appoint more fund managers to increase distribution.
- Impact: Unlikely. At this point, there’s no real need for more players in the mix.
Three long, lacklustre years after the new pension scheme (NPS) was launched, there’s finally an attempt to resurrect its flagging fortunes. Despite being a much needed product providing a voluntary safety net, the NPS has failed to create a dent in individual savings. Now, after much deliberation by a committee headed by G.N. Bajpai, the Pension Fund Regulatory & Development Authority (PFRDA) has come out with plans to make the scheme more popular.