Minister of state for finance Jayant Sinha has highlighted the role of pension funds as a source of long-term finance for infrastructure development and the need to have increased pension flows in the debt and equity markets to reduce volatility. The minister said this while addressing a conference to promote the National Pension System (NPS) among corporates, corporate employees and private citizens in the light of the Budget announcements. The 'Conference on National Pension System (NPS) for Corporates and Points of Presence (POPs)', organised under the theme 'NPS- Expanding Horizons - The Way Forward'. Sinha also mentioned the need to have innovative products and services under retirement architecture, which would match the risk appetite of various types of customers. He emphasised the need for an inclusive pension scheme to cater to every class of the society in tune with the slogan Sabka Sath Sabka Vikas and said the budget announcements like the `Atal Pension Yojana' for economically weaker section of society and tax incentives for NPS as a step in that direction. Earlier, in his opening address, Hemant Contractor, chairman, PFRDA, said while the recent budget announcements have made life insurance, health insurance and pension affordable, he said the penetration of both pension and insurance schemes in the country is low and better coverage is required in view of the growing population of the elderly. He said operational issues in NPS like simplification of account opening, withdrawal, grievance management etc have been improved. He said PFRDA was in the process of finalising various regulations and expressed optimism about expanding the subscriber base in view of the large potential. Sinha said the government was focused on expanding the 'retirement market' in India, for which several initiatives have already been taken recently. Besides stressing on the need to allow more sophisticated products in the pension market, it is also important to ensure that more pension monies flow into equity markets, he added. Sinha said that expanding the 'retirement market' would bring India three benefits: it would protect citizens after retirement, result in flow of long-term funds into building infrastructure and help reduce volatility in the Indian stock markets. Tax on NPS withdrawal: The minister said prospective New Pension Scheme (NPS) subscribers should not get ''bogged down'' by the fact that NPS attracts tax at the time of withdrawal on retirement. ''What is important is - are you saving enough for retirement,'' he said. Later, PFRDA chairman Hemant Contractor told reporters that the Authority's board will take up the GN Bajpai committee report in the next two - three weeks. The panel had, among other things, recommended that government employees subscribing to NPS be allowed to choose their own pension fund managers, which could open the doors for private fund managers to manage pension monies of central and state government employees. PFRDA had organized the Conference with the main objective of sensitizing the distributors' community as also corporates whose role is crucial in extending the reach and coverage of NPS in the country, both for the organized and unorganized sectors in the aftermath of recent budgetary announcements including:
Currently, NPS has more than 8.7 million subscribers with total asset under management (AUM) of more than Rs80,800 crore. Source: domain-b.com, Image: https://upload.wikimedia.org
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