• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Port Info

• Ships in Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

New Delhi , Sept. 27

THE Pension Fund Regulatory and Development Authority (PFRDA) has assessed that the proposed New Pension System could attract about two crore subscribers during its initial days and that it could double in five to seven years.

"In our assessment, nearly 20 million people are waiting to join the new pension system immediately. In the short to medium term, which is around five to seven years, the number could swell to around 40 million," said the Chairman, PFRDA, Mr D. Swarup.

At the seventh annual Invest India Economic Foundation Pension Policy Conclave, 2005, here on Tuesday, Mr Swarup said one of the main challenges before the authority was finding ways to attract more and more people to subscribe to the New Pension System. "One of our major challenges is to see how we can wean away more and more people from current savings schemes into pension funds," he said.

The New Pension System will come into effect for the general public after Parliament approves the PFRDA Bill.

Mr Swarup said PFRDA hoped to build a "world class pension system" and the regulations for the sector would be both strong and flexible.

The Deputy Governor, Reserve Bank of India, Dr Rakesh Mohan, said a stable and low inflation regime was necessary for the proposed pension structure to flourish. "Only if we have low and stable inflation, can there be confidence in instruments required for the pension sector," he said.

He advocated that the new system should allow portability of funds when a subscriber switches from one job to another.

The Joint Secretary, Capital Markets, Mr U.K. Sinha, said there would be severe restrictions on premature withdrawal of funds by subscribers of the New Pension System. He said according to the current thinking, a subscriber would have to compulsorily invest at least 40 per cent of the accumulation at the age of 60 years to buy annuities.

Mr Sinha said nearly one lakh central government employees and those in autonomous bodies had joined the New Pension System that opened on January 1, 2004. He also said 12 State governments had voluntarily agreed to join the system and three more planned to take the plunge.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
`New pension plan can draw 2 crore subscribers initially' — Stable, low inflation regime vital, says Rakesh Mohan

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line