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PFRDA aims to clock 28% growth in subscriber base next year

Author: IANS/Wednesday, February 14, 2018/Categories: Regulatory

PFRDA aims to clock 28% growth in subscriber base next year

Kolkata - The Pension Fund Regulatory and Development Authority (PFRDA), which achieved a two crore subscribers' base on Monday, is looking at a 28% growth in subscriber base in the next year, an official said.

The PFRDA also expects that its asset under management (AUM) would grow by 45-47% in the next year.

"Our subscriber base is growing by 27-28% a year. Yesterday (Monday), we have touched two crore subscribers' mark. In the last March, there were about 1.54 crore subscribers. Going forward, we expect same pace of growth to continue in the next year," PFRDA's Chairman Hemant G. Contractor said.

He said: "The corpus is currently at Rs 2.25 lakh crore. The asset under management has been growing by about 45% annually in the last three years and in the last year, the growth was 47%. Next year, we expect similar trend to continue i.e. 45-47% growth."

He, however, said the proposal of long term capital gains tax will not have much impact on it.

"It does not have much impact on us. The investments in National Pension System are made by our trust (NPS Trust) which is a tax exempted body. As far as pension investments are concerned, LTCG will not have impact," he said.

However, Contractor said it has two types of accounts -- tier I and tier II.

"Tier II has no tax benefits. Tier II account would be impacted but investments in tier II are much smaller," he said.

Tier-I account is "the non-withdrawable" permanent retirement account into which the accumulations are deposited and invested as per the option of the subscriber.

Tier-II account is a "voluntary withdrawable" account which is allowed only when there is an active tier I account in the name of the subscriber. The withdrawals are permitted from this account as per the needs of the subscriber as and when claimed.

Responding to a query on how volatility in the equity market impacts it, he said that volatility was higher in the equity markets and its portfolio in equity was only about 15%.

The PFRDA would be "less impacted with volatility in equity markets", he said.

Speaking on the Atal Pension Yojana, he said the pension fund body has the target of reaching one crore subscribers under the Yojana by March 31.

"We are currently at about 88 lakh subscribers and we are trying hard in the remaining days of the year to touch the target. Next year, we will try for another 50 lakhs," he said, adding that the corpus for the Atal Pension Yojana was around Rs 4,000 crore.

He also said the PFRDA brought changes in terms of partial withdrawal.

"Earlier, there was a restriction that a person had to be in the system for 10 years before he or she could avail this facility of partial withdrawal. Now, we have reduced it from 10 years to three years. After three years, subscribers can avail partial withdrawal. Up to 25% of a subscriber's own outstanding contribution will be allowed to be partially withdrawn after three years," he added.

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