After a poor start that saw few takers for the New Pension System promoted by the pension regulator, moves are afoot to target public sector giants and large private companies to get their employees to benefit from the independently managed scheme aimed at providing social security to millions of Indians.
The Pension Fund Regulatory and Development Authority (PFRDA) has already met with some success in getting employees of state-controlled banks to join the system, while it is also talking to insurance companies for a similar plan. “We have written to the department of public enterprises to join the NPS and NTPC has shown interest,” said Rani S. Nair, executive director, PFRDA. NTPC has more than 23,000 employees.
Public sector employees contribute 30 per cent of their salary for retirement benefits out of which 24 per cent is covered by the Employees’ Provident Fund.
“We are looking for the additional 6 per cent (which is free to be invested anywhere) to come to the NPS,” said Nair. “We are looking at large scale, across the sector participation.”
PFRDA recently signed an agreement with the Indian Banking Association, which has already notified the banks that all the new recruits post April 2010 will be covered by NPS.
The regulator is also planning to talk to industry associations such as ASSOCHAM, FICCI and NASSCOM to rope in more subscribers. “These initiatives may take some time to materialise,” said Nair.