NO ROLE FOR FOREIGN PLAYERS IN PENSION SECTOR FOR NOW-PFRDA Chairman

PFRDA Chairman's priority is revamping NPS, expanding coverage.

  The new Chairman of the Pension Fund Regulatory and Development Authority, Mr Yogesh Agarwal, has said there is no role for foreign players in the sector at this point in time.

   Mr Agarwal also told Business Line that it is too early to allow pension funds to invest in the infrastructure sector.

   He said there are no discussions on permitting 26 per cent foreign direct investment in the pension sector or plans to tweak the current New Pension Scheme (NPS) norms to increase exposure of pension funds to the capital market.

  “The sector is yet to get going. These are not on the table now. We will take a call when the moment comes. Now the concern is to grow the sector,” Mr Agarwal said.

   He said the priority is to revamp the NPS system so that more non-Government/private sector employees join voluntarily (it is compulsory for Government employees to join NPS).

  In this regard, PFRDA is considering making the business of Pension Fund Managers (PFM) more viable by freeing the present fee structure and doing away with the cap on the number of PFMs. The seven PFMs had quoted very low fees to win the bid, but are suffering losses with the addition of every new subscriber due to the low fees, he said.

    A committee led by former SEBI Chairman, Mr G.N. Bajpai, will study these issues and submit a report, Mr Agarwal said. The aim is to let people choose PFMs based on cost structure and track record.

   Referring to the poor subscription to the NPS, he said there is no need to appoint another Central Recordkeeping Agency as there is little work to be given to a second CRA. The NPS now has only one CRA, which is National Securities Depository Ltd.

   Mr Agarwal also said PFRDA is in talks with the Unique Identification Authority of India on various issues, adding that “tying up with UIDAI will help identify more stakeholders for NPS.”

   On the low level of subscription (around 10 lakh people, including just 8,000 from the voluntary category), he said it was because of the wrong assumption that NPS will be bought and need not be sold.

   To increase coverage of NPS, one must try to follow the model of mutual fundand insurance companies that have their own people in bank branches selling their products and helping out with subscription through bank branches, he said.

   On the issue of the recent Ordinance reportedly giving powers to the Finance Minister to settle inter-regulatory issues, he said, “even today, when there is an inter-regulatory dispute, the Finance Minister steps in. The Ordinance only formalises this mechanism. I think it is a good step.”