Govt may relax norms for joining New Pension Scheme for PSU Employees

The government is considering relaxing norms to enable PSU employees to join the National Pension Scheme and a Cabinet note in this regard is likely to be moved soon, interim pension regulator PFRDA said on Wednesday.

“We have taken up this matter with the Department of Public Enterprises (DPE) Secretary and he has prepared a note which he would be soon taking to the cabinet,” Pension Fund and Regulatory Development Authority (PFRDA) Chairman Yogesh Agarwal said in New Delhi.

Under the existing guidelines, if an employee of central public sector undertakings (CPSUs) does not have a minimum 15 years of services, he or she cannot join National Pension Scheme (NPS), Mr. Agarwal said on the sidelines of a seminar titled “Financial Consumer Protection” here.

“Even with the government employees earlier, the instruction was if you do not have 20 years of services, you can’t have pension. When the govt notified the guidelines for NPS they did away with the criteria,” he said.

Talking about NPS Swavalamban, he said, it is a financial inclusion product operationalised by PFRDA.

There has been an overwhelming demand for the product launched in 2010, with a CAGR of 90 per cent in the three years of operation, more than 50 per cent of the eligible subscribers being below the age of 40, he said.

The scheme, with 72 per cent of the subscribers being women, has managed to bridge the supply gap in the unorganised sector for a long term defined contribution pension scheme, he added.

Mr. Agarwal also said that PFRDA has a strong consumer protection mechanism.

“It is evident from the fact that we receive very few complaints. In order to have real consumer protection, we need to introduce features in the product design itself which could prevent mis-selling,” he said.

He further said that improving financial inclusion with adequate consumer protection requires a multi—stakeholder framework of consumer, financial institutions, industry, regulators and government.