The economic survey has called for further reforms in the country’s pension architecture including

RELATED ARTICLES EPFO defers decision on min monthly pension of Rs 1,000 EPFO to decide on min monthly pension of Rs 1k on Friday Germany warns Greece: No more money without reforms

granting of statutory status to the Pension Fund Regulatory and Development Authority (PFRDA). The survey says that successful implementation of pension reforms would ensure the flow of long-term savings for development purposes.

“Provision of a statutory status to the pension regulator would help the PFRDA perform its regulatory and developmental roles effectively. The success of pension reforms will not only facilitate the flow of long-term savings for development, but also help establish a credible and sustainable social security system in the country,” the survey has mentioned.

The survey has pointed out that the major challenge that the interim PFRDA is facing at present is of expanding its distribution network to cover a wider section of the population. “The PFRDA faces the challenge of expanding the distribution network of the NPS (New Pension System) to cover the entire unorganised sector in the country, educate citizens to take appropriate investment decisions, based on their risk and return profile, and contribute to improved financial literacy levels,” the survey has said.

Officials of PFRDA said that the regulator has taken measures to expand its points of present (PoP) network. “We are in the process of licencing more PoPs. We have called for a fresh round of bids and have reduced the minimum net worth requirement to Rs 10 crore from the earlier Rs 100 crore. That would make more people eligible to come under the fold,” Rani A Nair, executive director, PFRDA, told Financial Chronicle.

She said that the existing network would get a major boost once the department of posts joins as a PoP. “The department of posts has already agreed to join the NPS. They were sorting out some of the information technology issues that have more or less been complete. They should be logging in soon and that would give us a wide reach in one go,” Nair said.

The NPS is at present available through nearly 900 service provider (SP) branches with 21 PoPs. Other than the department of posts, seven more financial institutions will be licenced as PoPs that is expected to expand the PoP-SP network by more than five times.

The survey has mentioned that efforts are underway to extend the reach of the NPS to new segments such as central and state autonomous bodies and the organised sector and introduce micro-pension initiatives focusing on a low-cost model of the NPS to be implemented through self-help groups (SHGs) and similar bodies. “More than 250 central autonomous bodies have evinced interest in joining the NPS. Several state government autonomous bodies and undertakings are in dialogue with the PFRDA for extending the NPS to their employees. The PFRDA has also launched a scheme for management of the pension corpus of various companies under the NPS architecture,” the survey mentions.

Nair said that many new autonomous bodies are set to join the NPS soon. “We already have around 70 autonomous bodies who have joined the NPS. Many more are in talks. We expect more to join us since many are in talks with us,” she said.