NPS needs overhaul to attract customers
NPS big investors may need to pay more; move to benefit small savers, incentivise sellers Commission included in the price is the cause of m...
https://iskablogs.blogspot.com/2011/07/nps-needs-overhaul-to-attract-customers.html
NPS big investors may need to pay more; move to benefit small savers, incentivise sellers
Commission included in the price is the cause of mis-selling: D Swarup, FPSB
Bajpai committee report on retirement scheme for individuals likely by May-end: PFRDA
New Pension Scheme: Should you invest in the NPS?
NEW DELHI: The New Pension Scheme or NPS needs a massive overhaul to provide an effective social security cover for 90% of India's workforce that works in the informal sector. A committee headed by former Sebi Chairman GN Bajpai has recommended lower charges and fees as well as lower minimum contributions for the NPS to attract unorganised sector workers.
The Pension Fund Regulatory and Development Authority or PFRDA had set up the Bajpai committee in August 2010 to diagnose the problems that had made the NPS a virtual nonstarter among private citizens since it was opened up in May 2009. The expert panel has also asked the pension fund regulator to offer better incentives for distributors and do away with restrictive norms for their appointment, to expand the scheme's reach.
The Bajpai panel has mooted lowering the minimum annual investment threshold from Rs 6,000 to Rs 1,000 to attract lowerend customers to join NPS. This, the panel pointed out, could also give NPS users a chance to avail of the Rs 1,000 annual contribution offered by the government under its Swavalamban scheme for the poor. The Bajpai committee has also suggested ad-valorem structure for distributors and said that PFRDA should look at appointing all categories of distribution agents to distribute NPS and evolve a regulatory framework to penalise mis-selling .
It has also asked the PFRDA to revise the annual maintenance charge of Rs 280 and commission fresh research into calculating the cost of NPS delivery. Further, the Bajpai report has suggested that PFRDA should tap the postal department's network and the reach of mobile phone operators to expand its accessibility for potential savers.
"It can engage with the postal department proactively to increase the number of branches selling NPS. Another option is to appoint the numerous mobile telecommunications service providers," suggested the report submitted to PFRDA chairman Yogesh Agarwal on Friday. The report said that the PFRDA should work out a comprehensive marketing action plan and a branding campaign to popularise its pension schemes. "Promotion of NPS should be a part of the national financial inclusion agenda," the report said.
Commission included in the price is the cause of mis-selling: D Swarup, FPSB
Bajpai committee report on retirement scheme for individuals likely by May-end: PFRDA
New Pension Scheme: Should you invest in the NPS?
NEW DELHI: The New Pension Scheme or NPS needs a massive overhaul to provide an effective social security cover for 90% of India's workforce that works in the informal sector. A committee headed by former Sebi Chairman GN Bajpai has recommended lower charges and fees as well as lower minimum contributions for the NPS to attract unorganised sector workers.
The Pension Fund Regulatory and Development Authority or PFRDA had set up the Bajpai committee in August 2010 to diagnose the problems that had made the NPS a virtual nonstarter among private citizens since it was opened up in May 2009. The expert panel has also asked the pension fund regulator to offer better incentives for distributors and do away with restrictive norms for their appointment, to expand the scheme's reach.
The Bajpai panel has mooted lowering the minimum annual investment threshold from Rs 6,000 to Rs 1,000 to attract lowerend customers to join NPS. This, the panel pointed out, could also give NPS users a chance to avail of the Rs 1,000 annual contribution offered by the government under its Swavalamban scheme for the poor. The Bajpai committee has also suggested ad-valorem structure for distributors and said that PFRDA should look at appointing all categories of distribution agents to distribute NPS and evolve a regulatory framework to penalise mis-selling .
It has also asked the PFRDA to revise the annual maintenance charge of Rs 280 and commission fresh research into calculating the cost of NPS delivery. Further, the Bajpai report has suggested that PFRDA should tap the postal department's network and the reach of mobile phone operators to expand its accessibility for potential savers.
"It can engage with the postal department proactively to increase the number of branches selling NPS. Another option is to appoint the numerous mobile telecommunications service providers," suggested the report submitted to PFRDA chairman Yogesh Agarwal on Friday. The report said that the PFRDA should work out a comprehensive marketing action plan and a branding campaign to popularise its pension schemes. "Promotion of NPS should be a part of the national financial inclusion agenda," the report said.
Source:ET
