The Hindu Business Line : New pension plan may be extended to unorganised sector

Mumbai, Sept. 26 The Pension Fund Regulatory and Development Authority (PFRDA) will seek the help of an institutional advisor to extend the New Pension Scheme (NPS) to the unorganised sector, said Mr N.K. Rayalu, Chief Executive Officer, New Pension System Trust.

Speaking at a pension fund convention organised by Indian Merchants Chamber here on Friday, he said the scheme could be extended to the unorganised sector in six months.

The institutional advisor will help the authority work out the modalities for admitting members from the unorganised sector to the scheme and also the collection of contribution from them through points of presence, he said.

Mr Rayalu said the committee, headed by Mr Deepak Parekh, Chairman of Housing Development Finance Corporation, will suggest various options, including the default option, for pensioners to invest their funds. The committee is expected to submit their recommendations in the next couple of months.

In the case of the unorganised sector, employees will have to bear the cost of record keeping by the Central Record Keeping Agency.

Explaining the NPS, Mr Rayalu said pensioners will be able to switch from one fund manager to another if they are not satisfied with the returns, which will be detailed every year-end.

Currently three fund managers — SBI, UTI and LIC — are following the guidelines of PFRDA in investing the Rs 1,500 crore.

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