regulator now wants to select PFMs through a transparent and competitive bidding process based on who quotes the minimum fund management fees.
"The proposed appointment, under the current RFP process, shall be valid for a period of 5 years, and the successful bidders appointed as Pension Funds shall have to obtain/retain validity of a registration certificate after satisfying/continuing to satisfy the eligibility criteria as may be specified under the PFRDA Act and/or rules or regulations framed from time to time for continuing its operations as PF, failing which, it will cease to act as PF and the appointment/registration will be liable to be withdrawn/cancelled," the regulator said.
While PFMs have to submit their respective bids for fund management fees, the selected players will have to accept the lowest bid to qualify as PFMs.
NPS was initiated by the government in 2004 as part of the reform to switch over to a defined contribution scheme from the earlier defined benefit scheme, to reduce the future pension liability. Central government employees recruited since 2004 were mandatorily offered NPS.