Highlights the Role of
Pension Funds as a Source of Long Term Funds for Infrastructure Development and the Need to have Increased
Pension Flows in the Debt and Equity Markets to Reduce Volatility; Conference on National Pension System Held on the Theme of
“Nps - Expanding
Horizons: The Way Forward”
The Union Minister of
State (MoS) for Finance Shri Jayant Sinha has emphasised the need
for inclusion of pension for every class of the society with the
slogan “SABKA SATH SABKA VIKAS” and described the latest budget announcements like “Atal Pension
Yojana” for economically weaker section of society and tax incentives for NPS
as a historic step. He also highlighted the role of pension funds as a source
of long term funds for infrastructure development and the need to
have increased pension flows in the debt and equity markets to reduce
volatility. The Minister of State for Finance Shri Sinha was speaking as the
Chief Guest at a Conference on National Pension System
(NPS) for Corporates and Points of Presence (POPs) organized here today under
the theme “NPS- Expanding Horizons- The Way Forward”. The basic objective of
the Conference was promotion of NPS among corporates, corporate
employees and private citizens in the light of the Budget announcements.
The MoS (Finance) Shri
Sinha further mentioned the need to have innovative products and services under
retirement architecture which would match the risk appetite of various types of customers.
Earlier in his Opening
Address, Shri Hemant Contractor, Chairman, PFRDA said that the recent budget
announcements brought social security to the forefront by making available life insurance, health
insurance and pension at affordable rates. He stated that both pension and insurance penetration in the
country is low and better coverage is required in view of the growing
population of the elderly. He said that operational issues in NPS like
simplification of account opening, withdrawal, grievance management etc. have
been improved. He also conveyed to the participants that PFRDA is in the
process of finalising various regulations. He expressed optimism about growing
the subscriber base in view of the large potential.
Mr R V Verma, Member,
PFRDA hailed the recent Budgetary announcements for providing the strategic
direction for shaping the pension landscape in the country to convert the
society from “pension less” to “pensioned” one and described these initiatives
as next generation pension reforms apart from articulating that Union
Government had undertaken first generation pension reforms, by moving from
Defined Benefits (DB) Pension to Defined Contribution (DC) Pension.
As a part of the
said conference, a panel discussion on the theme of ‘Budget 2015-16: Way
Forward for NPS and the Indian Pension Sector’ was also held. An array of
distinguished panellists from the domain of finance and investment participated
in the discussion and shared their experience, insights and valuable inputs.
PFRDA had organized
the Conference with the main objective of sensitizing the distributors’
community as also Corporates whose role is crucial in extending the reach and
coverage of NPS in the country, both for the organized and unorganized sectors
in the aftermath of recent budgetary announcements including:
(i) The limit on
deduction on account of contribution by employee to NPS, which was capped at
Rs. 1.00 lac last year, has been removed and now the tax deduction can be
claimed up to 10% of salary subject to ceiling of Rs. 1.50 lacs.
(ii) An additional
deduction for the investment up to Rs. 50,000 in NPS has been introduced under
sub-section 80CCD(1B). This is over and above the limit of deduction available
under sec 80CCD(1). This is an exclusive tax deduction available only for
investment in NPS and not available for any other investment.
(iii) As a significant
measure for promoting a unified pension system in the country, the Government
has announced in the budget, the option for employees to select either EPF or
NPS.
(iv) For providing
pension to workers employed in unorganized sector not covered by Statutory
Social Security Schemes, the “Atal Pension Yojana” (APY) has been
announced for providing a defined benefit pension to the members, depending on
their amount and period of contribution. This is expected to bring a lot of comfort
to the weaker and disadvantaged section of the population who do not have a
formal employment.
Shri R. V. Verma
emphasised the good features of NPS and the scope it offers to corporates for
providing old age social security that they can offer to their
employees. He urged all the Indian corporates to partner with PFRDA for
promoting NPS to their employees and reiterated PFRDA’s continued and
committed support in this regard.
Currently, NPS has more
than 87 Lakh subscribers with total Asset Under Management (AUM) of more than
Rs.80,800 crores.
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