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.