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Come November, around 93 lakh subscribers to the National Pension System will feel the pinch as the National Pension Trust starts levying a fee.
The fee will be at 0.01 per cent of the assets under management and has been approved by the Pension Fund Regulatory and Development Authority (PFRDA). On the NPS AUM of ₹1 lakh crore, the fee will amount to ₹10 crore. Each contributor will pay a fee of 0.01 per cent, but the amount will vary with his/her subscription.
As on September-end, there were 93,33,580 National Pension Scheme (NPS) subscribers with a total contribution of ₹80,031 crore. This corpus, whose value now aggregates to ₹1 lakh crore, is managed by seven pension fund managers, including LIC Pension Fund, SBI Pension Funds, UTI Retirement Solutions, and HDFC Pension Management.
A senior official at a pension fund said: “Since the government has a policy that all regulators should be self-funded, they will be collecting the fee. This (fee) will come out of the subscribers’ pocket.”
However, the Trust is believed to be working on having a second CRA (central record-keeping agency). Once this becomes a reality, the fee for the subscriber can come down. Currently, NSDL e-Governance Infrastructure Ltd is the sole CRA under NPS.
NPS was launched in 2004 with the objective of providing a retirement income to all citizens. Under the NPS, the accumulated wealth depends on the contributions made and the income generated from investment of such wealth.
Initially, NPS was introduced for the new government recruits (except Armed forces). With effect from May 1, 2009, NPS has been opened for all citizens of the country, including unorganised sector workers, on voluntary basis.
CRA is responsible for recordkeeping, administration and customer service functions for all NPS subscribers, including receiving instructions from subscribers through the points of presence, transmitting such instructions to pension funds and effecting switching instructions received from subscribers.
The NPS Trust, which was established by PFRDA in 2008, takes care of the assets and funds under the NPS in the interest of the beneficiaries (subscribers).
In the first half of the current financial year, the NPS saw 5,84,931 new additions to its subscriber base.
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