RFP to onboard new Pension Fund Managers by Dec-end, says PFRDA chief

PFRDA Chairman Supratim Bandyopadhyay

The Pension Fund Regulatory and Development Authority (PFRDA) will issue the Request for Proposal (RFP) to onboard new Pension Fund Managers (PFMs) by December-end, said the pension regulator’s Chairman Supratim Bandyopadhyay.

The proposed RFP will come up with some entry barriers so that only “serious players” can enter, he said at the 22nd CII Insurance and Pensions Summit, which was virtually held this year due to the pandemic.

“Everybody is welcome. Hopefully, we will not be restricting the numbers. There will some entry barriers to see that only serious players should come. We welcome everybody if they wish to manage it,” said Bandyopadhyay.

Currently, the entire NPS monies (nearly ₹5-lakh crore) are handled by seven pension fund managers, including a few in the private sector. The PFRDA is keen to bring in more players with better remuneration structures. “We are certainly reviewing the existing cost structures of PFMs and other intermediaries. We are doing a cost benefit analysis and definitely very soon we will see some changes,” he said.

For the past few months, the PFRDA has been working closely with the Department of Financial Services (DFS) in the Finance Ministry on the draft FDI rules in the pension sector.

“Once the final FDI rules for pension sector is issued (by DFS), we will come out with a RFP for onboarding new PFMs. Rules for FDI is important and that is why we could not earlier go ahead with the RFP. We don’t want confusion at later point in time,” Bandyopadhyay had recently said.

Meanwhile, the PFRDA Chairman also said that time has come for annuity products in the country to be market linked. “I think there is need for viable annuity and this has to be looked into. Like floating rate home loans, why not there be floating annuity rates,” he wondered.

Source: https://www.thehindubusinessline.com/money-and-banking/rfp-to-onboard-new-pension-fund-managers-by-dec-end-says-pfrda-chief/article32641675.ece