The Pension Fund Regulatory and Development Authority (PFRDA) has said that it will look into the fee structure for pension funds.
Currently, pension fund managers in India earn one paise for every INR100 of funds managed under the National Pension System (NPS) which the PFRDFA oversees, reported Moneycontrol.
Mr Supratim Bandyopadhyay, PFRDA chairman, said, “Nowhere in the world do fund managers operate at such a low fee. We will look into it and see that the fee is improved,” he told Moneycontrol.
He said that there is a need to have a fine balance in fund management fees between fund managers and customers. He said the idea is to incentivise pension fund managers while ensuring that customers don’t end up paying a high fee.
He said, “We would like to see more pension fund managers in the sector and strong financial sponsors with good track record should come into the pension fund management fold. More players would mean better fund management practices through increased competition.”
Currently, there are three pension fund managers for the government sector—LIC Pension Fund, SBI Pension Fund and UTI Retirement Solutions. In addition to them, private players include HDFC Pension Management, ICICI Prudential Pension Fund Management, Kotak Mahindra Pension Fund and Aditya Birla Sun Life Pension Management.
Asia Insurance Review