Thursday, Dec 09, 2021
Outlook.com
social security: pension plans

Rainy Days

Central pension plan NPS finally gets a boost

Rainy Days
Bhupinder Singh
Rainy Days
outlookindia.com
-0001-11-30T00:00:00+05:53

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.

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