Pension scheme hits election code hurdle

NEW DELHI: The New Pension System (NPS) has hit the Election Commission roadblock with government deferring launch of the scheme for all citizens.

The Pension Fund Regulatory and Development Authority (PFRDA) on Thursday decided to keep in abeyance its pension scheme for private and unorganised sector employees due to the election code of conduct.

While all new employees of central and many state governments were brought into the NPS from January 1, 2004, the scheme was set to be rolled out for general public from April 1, 2009.

The government had transferred the accumulated funds of its staff along with a matching contribution to the three fund managers appointed by PFRDA for investment management on April 1, 2008.

In August last year, the central government had asked PFRDA to extend the NPS to all citizens. As part of the process, the regulator had appointed six new fund managers and 23 points of presence for managing NPS contributions.

The pension fund regulator had also started an advertising campaign in the last week of February to seek participation of general public.

On February 17, an expert committee constituted by the PFRDA had mooted investment guidelines while recommending to invest subscribers funds in 50 select stocks of NSE and BSE while making three different choices to the investors. The committee had also suggested a third-party evaluation of the equities and other investment instruments to be opted by fund managers.

The six fund managers, in addition to LIC, SBI and UTI, will have the mandate to invest upto 50% of an individual's pension fund in equities.

The three different investment options under E, G and C category mooted by the expert committee range from high-risk equities to low risk government bonds and a moderate return option under corporate bonds.

Before the scheme hit the EC roadblock, it was proposed that any citizen could join the NPS with a proposed minimum investment of Rs 6,000 annually.