Social security system in India is weak and out of 1.2 billion only 12-13 percent people espicially from Government sector get the coverage. The Pension Fund Regulatory and Development Authority (PFRDA) has been making efforts to popularise social security among informal sector and also wants rural people to ensure that after certain age they too need to be retired with social security ( pension) coverage.
“ It is heartening to note that the government is focusing on pension and recently launched Atal Pension scheme for underprivileged and informal sector, Hemant Contractor, Chairman, PFRDA told RM on the sidelines of a summit.
He said that gradually National Pension Scheme ( NPS) is gaining popularity among all section of society, however there are certain roadblocks and that need to be addressed soon.
Contractor said that to make NPS more popular and easily accessible, the PFRDA had planned to launch its online version but that has been deferred in the wake of the recent Supreme Court order on Aadhaar card.
In view of the Supreme Court order — which prohibits the Unique Identification Authority of India (UIDAI) from sharing subscriber information with third parties, PFRDA is now exploring a non-Aadhaar based mechanism for meeting the know-your-customer (KYC) requirement.
“We will go for other options of e-KYC if Aadhar can not be used for autherisation by a third party. But the process may take a little more time,” said Contractor.
The PFRDA was a strong supporter of management of funds by private sector as well.
The Regulator said that the government should allow private sector fund managers to manage government portfolios as well.
"We have only public sector fund managers managing the government portfolio so their (G N Bajpai Committee) recommendation was that even private sector fund managers should be allowed (to manage government funds).
"We also feel that there is a case for that so we have recommended that to the government," Pension Fund Regulatory and the matter was under consideration.
Contractor further said that the matter is also lying with the government and the regulator (PFRDA) would like decision to come fast.
Inspite of volatility in the stock market, the PFRDA has been putting money in equities and it wants to increase its investments upto 50 percent in the same. Presently 50 percent funds is being managed by public sector and only 15 percent by private fund managers.
The PRFDA chief said that in long term equity market gives the best return and it has been proven globally.
"We have been putting money in equities. The issue was increasing the proportion of money going into equities. The proposal of allowing PFRDA to invest more money in equity is also lying with the government," Contractor said, stressing on the need of expanding the coverage of pension in the country.