Government is expected to take a decision soon on a
proposal to allow its employees to raise their contribution in stocks as
well as choose fund managers under the New Pension System, regulator
PFRDA said.
“As you know we have been talking with
government to open up the choice of both the fund manager and investment
pattern for the government subscribers, these discussions are still
going on. The proposals are with the government and hopefully a decision
will be taken up by them very shortly,” Pension Fund Regulatory and
Development Authority (PFRDA) Chairman Hemant G Contractor said today.
Contractor
said that government had expressed concerns that all employees would
not be able to understand the investment pattern and may end up making
wrong choices.
However, PFRDA recently conducted an online survey
involving over 10,000 government employees–both central and state, and
found that about 48 per cent of the people were pretty aware of
financial things, he said.
Contractor said the findings of the
survey were quite interesting as almost 48 per cent government employees
were having an average financial literacy rate.
“The level of
financial literacy was not as bad we thought as. Only about 24 per cent
has low score. We passed it on to the government, so we hoping that with
the results of the survey, the government will be able to take
decisions faster,” he added.
Currently, pension funds under PFRDA
are allowed to invest up to 15 per cent of the government employees’
corpus into stock market. While, for private sector employees it is up
to 50 per cent.
Among others, PFRDA will also allow NPS
subscribers to choose from commercial mortgage based securities or
residential mortgaged based securities, units issued by Real Estate
Investment Trusts, asset backed securities, units of Infrastructure
Investment Trusts under the alternative investment funds (AIF).
As
of September 6, 2016 PFRDA regulated NPS and Atal Pension Yojana (APY)
together have 1.34 crore subscribers with total Asset under Management
(AUM) of Rs 1.45 lakh crore.