A top official has said that PFRDA is finalizing the assured return investment plan under the NPS architecture, while keeping an option to keep it open at a fixed minimum return or benchmark real-time rate.
The Pension Fund Regulatory and Development Authority may finalize the product by the end of this month. However, the launch may take a few more months, PFRDA chairman Supratim Bandyopadhyay said.
“We had two-three rounds of discussions with pension fund managers, our expert committee members with EY team. We have given some sort of shape to that (product), mostly the final shape will be done by the end of September. Launch. It will take some time as it requires a lot of development related to the system as it is a completely new kind of scheme,” Bandopadhyay told PTI in an interview.
As the name suggests, the objective of this scheme is to provide minimum guaranteed returns to the investors. However, the regulator is yet to decide on the quantity.
“We are keeping that option open. It can either be a fixed return of x percent or it can be related to a real-time benchmark, like a one-year Treasury bill or something like that. So, both things are open, “They said.
over a period of 13 years, PFRDA Pension schemes have given an average return of more than 10 percent on investment.
Bandyopadhyay stressed that the structure of the plan will be ready more or less by the end of September, but it will take a few more months to finalize it.
“We will try to bring out the plan within this financial year. There is market interest for such a plan product and it will give visibility to the existing plan… Markets are always volatile. Maybe two years ago it was COVID, yesterday something and may.”
He added that it is also challenging to provide any kind of guarantee in a volatile market, but despite this, PFRDA aims to offer such products to its customers.
Answering the question why one should opt for assured returns, if in general it is delivering more than 10 per cent rate, he pointed out that there are different patterns in investment behavior of people.
Many in the upper age bracket may think that they have reached a stage that is not worth risking in a volatile market.
The average of more than 10 per cent given over the past decade can go down and at the same time there is no guarantee of market linked returns, so the offer of assured returns can be promising for investors.
PFRDA offers two major pension schemes – NPS and APY. While the National Pension System (NPS) caters to workers in the organized sector, including the central and state governments, the Atal Pension Yojana (APY) addresses the pension needs of those working in the unorganized sector of the country, which accounts for the bulk of Is. Employment generation in the country.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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