IDFC,
one of the fund managers of National Pension Scheme (NPS), today said the
proposed revision in fund management charges will help sustain the retirement
fund industry in the long-run as all players are losing money under the present
fee structure.
"The proposal to raise fund management charges in NPS will
sustain the pension fund industry in the long-run as all players are losing
money with the current charges," IDFC Chief Executive for Pension Funds
Vikash Raj told reporters here.
He said as per the revised NPS guidelines, management charges
will be revised soon, which is a welcome step.
At present, fund management fee is a dismal 0.0009 per cent per
Rs 10 lakh in which all fund managers are losing money.
However, the revised guidelines have a provision for raising the
commission with a cap provided by the pension fund regulator, PFRDA.
"If it (the charge) is fixed at around 0.25 per cent, then
the business model will be sustainable," Raj said.
Reacting to new norms about appointing any number of fund managers
from the existing six, he said this would help in garnering a higher number of
subscribers.
Total corpus of NPS, a contribution-based scheme launched in May
2009, is around Rs 18,000 crore, majority of which is contributed by the public
sector employees.
"As the number of players (fund managers) increase, this
will help in raising the investor base," Raj said.
NPS, among the low-cost pension schemes in the world, has failed
to take off among general public and private sector employees due to less awareness
about the plan, he said.
"As awareness increases, the NPS is likely to become
popular among the private sector employees and general public," he added. {Source Indian Express, News)
No comments:
Post a Comment