Pension fund managers, who can just hawk various retirement-savings products now, may soon get marketing rights as sectoral regulator PFRDA is set to take a proposal in this regard to the its board shortly, the industry watchdog said Tuesday.
There are eight private sector pension fund managers at present and PFRDA said it will soon invite RFPs (requests for proposal) to allow more players in.
Currently the pension fund managers can only sell products, which means they cannot market/advertise the same, and the move, if approved, will allow these fund managers to better target and sell the products.
“There has been demand from pension fund managers to allow them to do marketing. We are open to the idea and the proposal will be taken up at the next board meeting,” PFRDA chairman Hemant Contractor told reporters on the sidelines of a CII event on pensions and insurance.
Contractor also said despite a 37 per cent growth in subscription in FY18, only 15 per cent of the working population of over 500 million are covered under pension schemes mainly through the public sector EPFO and NPS.
When it comes to the unorganised sector, only 2-3 percent of the employees are covered under various pension schemes, including NPS.
The NPS corpus has touched Rs 2.61 trillion last fiscal and may touch Rs 2.8 trillion this year, he said.
On the Atal pension scheme, he said the subscriber base has touched 11.1 million and hopes to add five million more this year and the NPS base to grow at over 30 per cent this fiscal from around 23 million last year.
Underlining the need to save for the old age, Contractor said the number of people above 60 will more than double to 300 million by 2050 from 130 million now, posing a big social challenge to provide for their care, if they are not saving for their old age.
The government is providing a monthly pension of Rs 200 to 25 million under the Indira Gandhi Pension Yojana with an outlay of Rs 15,000 crore per annum now, Contractor said.
Addressing the same seminar, Nilesh Sathe, member (life), at the Insurance Regulatory and Development Authority of India (IRDAI), called for allowing savers to draw down on any time, a provision which does not exist now and found fault with locking up funds in annuities without allowing withdrawal.