further (as a percentage of the corpus). As more members join, we are looking at appointing a second CRA. We will have a request for proposal and then evaluate both on technical and financial parameters. NSDL also has to renew its licence after 10 years of operation. We have to go a long way. Competition (among CRAs) will improve efficiency. But we can’t expect too much reduction of cost as then efficiency and quality of services will be compromised.
Why not link charges to different slabs of investment or raise the minimum investment limit of R6,000 per annum so that the charges as a percentage of the corpus come down?
You can’t impose different charges depending on the value of investment. The administrative charges are same for all. However, point of presence (PoP) charges vary depending on the corpus of an individual. We are not thinking of revising the minimum investment limit as of now.
Are there any plans to relax the investment pattern of NPS?
We have already taken up with the government that their employees should get the same choices as private sector employees. First, in the investment pattern and, second, in choosing their PFMs. The government has agreed on the investment pattern. We have gone back to the government on PFMs saying why should they (government employees) be confined to PSU PFMs.
The finance ministry has agreed on that also, but we are waiting for a formal communication. Once we get that, we will notify the new rules.
Will you hike the equity exposure in NPS beyond 50%?
We are not thinking of that as yet.
PFRDA has allowed 8 PFMs so far. Are there more applicants? How many PFMs will you allow to enter the pension business?
There is already a flurry of applications including that from major foreign pension funds. But we are being selective. We are looking at 15-20 PFMs over the years. If we find some very good PFMs, we may allow them to manage NPS.
Now that the Pension Bill is passed in Parliament, do you see major FDI inflows?
The FDI limit in pension is linked to that in insurance. I am happy with 26% FDI cap. We will be happier with 49%. But the sectoral cap is a non-issue for pension as the minimum capital requirement is just R25 crore. Like mutual funds, the capital requirement is less in pension. Increasing FDI to 49% will provide for only R5.75 crore additional