Insurance regulator PFRDA wants government employees to be given freedom to choose their fund managers and investment pattern for money invested in Atal Pension Yojana.
“We have been asking the government for allowing the choice of pension fund manager and choice of investment pattern to be given to government employees/subscribers also.
We have taken up this strongly with the government”, Pension Fund Regulatory and Development Authority of India (PFRDA) Chairman Hemant G. Contractor told reporters at a media briefing here.
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“So that means the government subscribers will have freedom to choose their pension fund manager and their investment pattern,” he added.
PFRDA will also allow investment in alternative investment fund (AIF).
“We are now allowing some investment in alternative investment fund, say up to 5 per cent. Within that, up to 2 per cent is to be in the private equity and venture capital fund. This is the one step that we have decided to take”, he said.
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The proposal for more equity investment for government subscribers is still under consideration.
“So if this is allowed, the amount that goes into equity investment for government subscribers will go up from the present 15 per cent to as much as 50 per cent. Right now government employees do not have any choice, whatever the government has decided, they have to accept. But here individuals will be given choice”, he said.
Presently, there are about 40-45 lakh government employees under APY and do not have same freedom of choice as their private counterparts.
Further, to attract more subscribers under APY, PFRDA has also asked 20,000 post offices under core banking facility to join them.
As of now, 1,000 post offices are already engaged with PFRDA to sell the scheme.
“Till now 1,000 post offices are operating (for APY). But now 20,000 post offices are under core banking, so we have requested all of these 20,000 to join”, Mr. Contractor said.
The corpus under management of the PFRDA is Rs 1.9 lakh crore.
Government had launched APY to address the longevity risks among the workers in unorganised sector and to encourage the workers in unorganised sector to voluntarily save for their retirement last year.
Under APY, each subscriber on completion of 60 years of age will get the guaranteed minimum monthly pension or higher monthly pension, if the investment returns are higher than the assumed returns for minimum guaranteed pension, over the period of contribution.