PFRDA to implement new pension schemes

NEW DELHI: Pension Fund Regulatory and Development Authority (PFRDA) would be implementing new pension schemes for the centre and state government subscribers by appointing central record keeping agencies (CRAs) and four fund managers in next three months, announced PFRDA chairman D Swarup. This would be done through an executive order route since PFRDA bill is still languishing in the parliament.

Speaking at the seminar organised by industry body Assocham Mr Swarup also announced that in next couple of years with new pension schemes in place, the size of domestic pension business would touch Rs 2 lakh crore.

However, he warned that in the absence of new pension schemes, the total fiscal stress on both the centre and state governments, to extend pension benefits to the employees, would increase to Rs 1,60,000 crore from Rs 75,000 at present annually.

Moreover the finance ministry has empowered PFRDA through issuance of an executive order to appoint CRAs and pension fund managers under the new schemes for which letters of intentions have also been expressed.

He added that the four fund managers would be drawn from public sectors companies. The PFRDA has already created an initial corpus of Rs 1500 crore for the new schemes which that would offer returns to their subscribers between 14-29%.

PFRDA has also recommended to the finance ministry to grant investment incentives of Rs 20,000-30,000 for new pension fund subscribers, thereby taking the limits of income tax exemptions in various schemes from existing levels of Rs 1 Lakh to Rs 1.3 lakh.