The Pension Fund Regulatory and Development Authority (PFRDA) expects to get the board’s approval for the minimum assured return scheme in the next 7-10 days, chariman Supratim Bandyopadhyay said on Friday.
“The minimum assured return scheme is still under board consideration… We told you that we would be able to launch it by September 2022, but there were many issues,” he said. Bandyopadhyay was addressing media at a roundtable on Friday.
“When we are launching a product of this sort, we have to take all possible care that the product is launched with the right intent and it is acceptable to the market. It was presented to the board and the overall structure was presented to them. They are considering that,” he said.
The product is designed to provide a guaranteed return for 10 years, rather than a market-linked return. Nevertheless, the pension fund regulator can review this rate of return on an annual basis and revise the same on the basis of prevailing market conditions.
“Ten years is a long period. How do we know that a COVID- or a 2008-2009-like situation will not come? That is why we have the right to annually review the rate of return. PFRDA will do it. If they feel that the return needs to be different, it can be revised upwards or downwards. Whatever committed is frozen till the rate is changed,” Bandyopadhyay said.
This return will be benchmarked against the 10-year government security.
As on December 31, total subscribers in the National Pension Scheme and the Atal Pension Yojana rose 24.6% y-o-y to 60.6 million. Assets under management rose 22.1% y-o-y to Rs 8.5 trillion. The portfolio is predominantly comprises government securities and corporate bonds.