Under the present New Pension Scheme (NPA) for corporates, the companies have been provided the option to select the government investment model under which asset allocation replicates the scheme as applicable to the central government employees.
However, this model has lost attractiveness after PFRDA allowed private fund managers to decide the investment management fee within the upper ceiling of 0.25% per annum.
Due to this differential fee offered by the PFMs from November 1, 2012, a new scheme called Corporate-CG scheme will be introduced with effect from November 1, 2012. The scheme will follow the government investment guidelines issued from time to time, PFRDA said in a notification.
The new scheme will be offered by only public sector PFMs, who have obtained registration under the PFRDA.
The system of distribution of funds among three PFMs, as at present, will no longer be available for the corporates under CG scheme and the corporate will have to choose only one PFM offering this scheme.
The existing three public sector PFMsSBI, UTI & LIC offering CG scheme will introduce the new scheme corporate-CG scheme from November 2012 with units of face value of R10 and an initial NAV of R10.00 per unit. The funds/assets in the existing CG Scheme in respect of Corporates will be transferred to the new scheme and proportionate units in the new scheme.