The Pension Fund Regulatory and Development Authority (PFRDA) is developing a pension scheme with minimum assured returns, the regulator’s chairman, Mr Deepak Mohanty, has said.
The proposed plan may require higher premium payments for higher returns, reported The Indian Express.
“That is very much in the works…there we have to balance risk and return,” Mr Mohanty said.
As the proposed plan will have an assured return, he said, the pension fund has to provide more capital because it is taking more risk. “We are considering that product. We have made some progress. We will come out with that product, and at the same time we would have to see that the return is attractive,” he added.
One insurance scheme that the PFRDA administers is the Atal Pension Yojana (APY), a government-backed pension scheme that is open to all bank account holders aged from 18 to 40 and primarily targeted at the unorganised labour sector. The contribution period is 20 years and the age when withdrawals can begin is 60.
Currently, there are about 53m APY subscribers. The PFRDA hopes to attract 13m more people to the schemer this year, against 12m last year, Mr Mohanty said.