The Pension Fund Regulatory and Development Authority (PFRDA) on Thursday allowed retirement advisors (RA) under the National Pension System (NPS) to charge an 'advisory fee' of 0.02 per cent on assets under management of existing subscribers.
In a move aimed at spreading pension coverage, the Pension Fund Regulatory and Development Authority (PFRDA) on Thursday allowed retirement advisors (RA) under the National Pension System (NPS) to charge an ‘advisory fee’ of 0.02 per cent on assets under management of existing subscribers.
The pension regulator has set minimum and maximum advisory feel at Rs 100 and Rs 1,000 per annum for extending retirement advice.
The levy will be over and above the on-boarding fee of Rs 120 and a fee of Rs 20 per transaction or a maximum of Rs 100 per annum for subsequent services have been stipulated.
However, PFRDA has said that retirement advisors will not be allowed to charge advisory fee from subscribers at the time of onboarding of the subscriber along with the onboarding fee of Rs 120. The advisory fee can be charged by retirement advisors only when subscriber has signed an agreement with the RA for providing advice, wherein the lower and upper limit of advisory fee as specified by the Authority may be incorporated.
The pension regulator has said that the scope of such ‘advice’ being provided by the retirement advisers in any manner, either oral or in writing to the subscribers will be limited to asset allocation and choice of Pension Fund Manager (PFM) for their financial assets under NPS or any other scheme regulated by PFRDA.
The PFRDA had recently announced the introduction of retirement advisors (RA), which include any firm, body corporate or an individual who engage in the activity of providing advice on National Pension System or other pension scheme regulated by PFRDA to prospects/subscribers or other persons or group of persons.
The pension regulator had said the role of an advisory entity would be critical in propagating the PFRDA schemes to the masses in order to achieve adequate social security. This requires penetration at the grass root level. “Educating and making people aware of the benefits of the retirement planning and creating awareness about the pension schemes regulated by PFRDA is critical for increasing participation in the voluntary segment of NPS and other pension scheme regulated by PFRDA,” it had said.