Blaming the ?government mentality? of keeping costs low for the lukewarm response of New Pension System (NPS), interim regulator PFRDA on Monday said there is need to give incentives to fund managers for popularising the scheme.
?…typically, the government mentality is to have lowest cost…It is so low cost that nothing is happening, nobody is selling, nobody is buying…why should we mandate a management fee on the pension fund managers,? PFRDA chairman Yogesh Agarwal said on the sidelines of a CII event.
He further said the regulator would explore the feasibility whether there is a need to free the management fee of fund managers and cap it at certain levels after taking views of the Bajpai-headed committee.
?…whether there is a need to free it and put a cap…we wait for the committee report to come and if they agree with our view then we would probably go ahead,? he added.
The Pension Fund Regulatory and Development Authority of India will review current fee structure of fund managers, Agarwal said.
PFRDA has appointed a committee headed by former Securities and Exchange Board of India chairman GN Bajpai to look into the fee structure and suggest changes.
The panel is likely to submit its report in a month or two, he said.
Fund managers are unable to sell the pension scheme as their fee is not economically viable. Currently, fund managers can charge 0.009% on the new pension scheme.