‘More confidence for investors’

Pension Fund Regulatory & Development Authority (PFRDA) has been operating through a series of agreements with fund managers and agencies to manage data and collect subscription. In a telephone interview PFRDA chairman Yogesh Agarwal tells TOI that with the enactment of a law, rules will be in place and investors will have more confidence in the retirement scheme.He also says that the finance ministry wants the pension regulator to manage the Employees’ Pension Scheme (EPS).
How will life change that the Pension Bill has been passed by Lok Sabha and will hopefully be cleared by Rajya Sabha by Friday?
It’s a historic step by Parliament. It is the first step towards providing old-age income security in our country. The immediate impact is that it will help provide better regulation of the sector as it will give the regulator powers. Backed by a statutory law, we can initiate action and punish any wrongdoer. Overall, it will provide more confidence to investors and will have a positive impact.
How much money has been invested in NPS so far? Since a bulk of funds are from the government, will the law encourage more individuals from private sector to opt for NPS?
We had close to Rs 35,000 crore in tby mid-August (from around 53 lakh subscribers). ATaw will increase the confidence of investors and more money will flow in.
What kind of returns have you offered?
On an average, on an annualised basis till March 2013, returns under our schemes were in the range of 12-14%, which is good.
Life insurance companies sell pension plans that come with high commission. With the law in place, will you look at regulating commission since NPS is a low-cost model?
Pension plans sold by other entities is in the domain of other financial sector regulators. In case of insurance companies it is in the domain of the insurance regulator and we have no jurisdiction over them. Whatever steps have to be taken have to be taken by them.
What about the since there have been suggestions that you should regulate it instead of EPFO?
As of now it is regulated by tEPFO. The finance ministry has written saying that EPS is inefficient and it should move to the PFRDA. But, it is for the labour ministry to decide on the issue.