vestors will soon have more outlets, including post offices, to invest in the new pension system (NPS). Unhappy with the existing distributors, the pension fund regulator has signed up eight more service providers to extend the reach of the scheme. The scheme was thrown open to all individuals in May last year, but has so far managed to sign up only about 3,000 subscribers. Pension Fund Regulatory and Development Authority (PFRDA) sees the distribution or the point of presence (PoP) as the weak link.
Department of posts, Bank of India, ICICI Securities, Muthoot Finance, Syndicate Bank, UTI Technology Services Ltd, Yes Bank and Karur Vysya Bank have now joined the NPS as PoPs. They are expected to add another 2,000 branches to the 880-branch network, where subscribers can open and operate their NPS "We have just signed an agreement with these PoPs but they will be operational in another two to three months," a senior PFRDA official said.
With IT connectivity a pre-requisite for handling NPS customers, the new points of presence require some time for identifying branches that can function as service providers for the scheme. They are also integrating their systems with that of National Securities Depository Ltd — the record-keeping agency of the NPS, the official explained.
The NPS was initially open to central government employees who joined service after 1 April, 2004. It was subsequently extended to private individuals in May 2009.
The biggest attraction of the scheme is the low fund management fee it charges — 0.009% against nearly 2.25% charged by mutual funds. It charges a fixed annual account maintenance fee of Rs 350 and an additional Rs 20 per transaction. The scheme has three plans with different exposure to equities.
In the first eight months of its operations, the scheme is giving 10-12 % returns , depending on the plan chosen by the subscriber.
source:economictimes.indiatimes
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