Deepak Mohanty, the chairman of the Pension Fund Regulatory and Development Authority (PFRDA), stated on Wednesday that the regulator is working on a pension plan that would offer a minimum assured return.
“We are taking that product into account. We have advanced in certain ways. We will release that product, but one must also consider that the return must be alluring, according to Mohanty.
Mohanty told the media earlier this week that if pension funds give guaranteed returns, they will need to raise solvency capital due to their low capitalization levels.
The minimum assured returns pension scheme would have a greater premium than others in order to guarantee attractive returns, the pension regulator said on Wednesday. Mohanty pointed out that because the pension fund is taking on greater risk in the scenario of a certain return, it must contribute more capital. “There, risk and profit must be balanced. Someone may provide assurance, but it will be expensive. Like in Atal Pension Yojana, the govt provides assurance and bears the expense, according to Mohanty.
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The Atal Pension Yojana (APY), he continued, now has roughly 5.3 crore subscribers, and this year, the centre hopes to add 1.34 crore more.
The team, led by finance secretary TV Somanathan, was established to study the pension system for public employees, but he declined to comment on it. The committee was established in response to numerous states returning to the Old Pension Scheme (OPS) and requesting the return of the NPS corpus.
“There is no provision in the statute to return the pension amount as it belongs to contributors,” the PFRDA chairman continued.
The five non-BJP states that seek to relaunch the Old Pension Scheme were told by the federal government in March that there is no provision in the PFRDA Act for a repayment of the built up NPS capital. The state governments of Rajasthan, Chhattisgarh, Jharkhand, Punjab, and Himachal Pradesh have notified the Centre of their decision to switch back to the OPS and have asked for a return of the corpus acquired under the National Pension System (NPS).
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