Pension Regulator PFRDA is considering bringing an innovative retirement product where pension will be higher than NPS. This information was given by Supratim Bandopadhyay, Chairman of the Pension Fund.
The Pension Fund Regulatory and Development Authority (PFRDA) is working on an innovative retirement benefit product that will guarantee a minimum fixed return. This will be done to attract more and more subscribers. This information was given by Supratim Bandopadhyay, Chairman of PFRDA.
Bandopadhyay said, ‘Apart from NPS (National Pension System) and Atal Pension Yojana, we are planning to bring some new and unique products to attract more and more customers. In this, the first product we are aiming for, it includes the minimum fixed return. He said this while addressing a webinar organized by ‘Institute of Actuaries of India’.
New product will get more pension
He said that at present pension funds are being managed in a mark-to-market accounting manner. In such a situation it is not easy to design the product for guaranteed return. Therefore, he has appealed to the Actuarial professionals to help the pension regulator in designing new products, assessing and managing the risk of financial investment and products. Bandopadhyay said that in addition to this, the regulator is considering giving more pension. Under this, shareholders can be offered a higher rate of pension if they are out of the NPS.
There is a steady decline in the interest rate on NPS
He said, ‘When out of the NPS, we only give an option to use at least 40% of the retirement fund’s pension head. The annual pension rate usually follows the interest rate in the market. This rate is going down. With the annual pension rate coming down, the older generation is unable to connect with this product. He said, “Can we bring some different kind of annual pension products, in which rates are changed according to some market-based standard?”