Mumbai: The pension fund regulator PFRDA has sought a time extension beyond the 2016-17 deadline for the government subsidy towards the 'Swavalamban' scheme so as to encourage more poor people to join the scheme.
The government contributes Rs 1,000 to each new pension account opened under Swavalamban scheme, which will end by March 2017. The benefit is available only to persons who join the National Pension System (NPS) with a minimum contribution of Rs 1,000 and maximum of Rs 12,000 per annum.
"We have requested the government to extend it further. The scheme is working as the government provides co-contribution of Rs 1,000. In the absence of this, nobody will join the scheme," PFRDA chairman Hemant Contractor told PTI on the sidelines of the global actuarial summit here.
However, he did not specify how long this subsidy should continue.
He further said the regulator is reviewing the entire commission structure of the pension fund managers.
"I expect some changes to take place in the commission structure for fund managers. The changes will be out in a month," Contractor said.
He indicated that the industry needs more products. At present, four pension products from the Centre, states, corporates and private citizens are regulated by the PFRDA, apart from Swavalamban scheme that caters to informal sector.
"The pension industry is very large and hence we need to come up with a few more products. There are a lot of people who are still not covered under any schemes. Even in the organised sector, the coverage is not very high. As of now, only 12 percent of the working class is covered under various existing pension schemes," he said.
Second phase of the Jan Dhan scheme will begin from August 16 this year and the Swavalamban scheme will then be included as a part of the scheme.
Commenting on it, he said, "We are in talks with banks for this, though they have already started distributing Swavalamban products under the scheme. But we will do it in a much bigger way now. We will tie up with more banks so that they can sell more Swavalamban products."
