NPS should be more credible and transparent
Economic Times Wealth, August 13-19, 2012: Readers’ response:
NPS should be more credible and transparent
The story ‘The best pension plan’ was highly informative and helpful. Considering the innumerable pension plans in the country, it is good to see one that is relatively simple and not prone to mis-selling. However a few problems have continued to plague NPS since its launch. Both the introduction and implementation of the scheme have been faulty. The NPS was started for the new central government recruits (excluding defence employees) at the beginning of 2004 even before the supporting legislation was in place. The NPS was kept outside the purview of the Sixth Pay Commission, even as the fund managers were made to agree to ridiculously low charges of 0.0009% for handling the funds, against the prevailing 2% for mutual funds. There seems to be an inordinate hurry to push through the scheme rather than introduce a reasonably reliable and credible social security plan. As the story points out, this is a good scheme and the government must work towards making it simpler and more accessible to investors.
MG Warrier, Mumbai
Note: ET Wealth published the above based on my following online comments, a telephonic conversation in response to an article sent to them on the subject
ET Wealth August 6-13, 2012: Online comments under New Pension Scheme story:
M G WARRIER (MUMBAI)
08 Aug, 2012 09:39 AM
The introduction and implementation of NPS have been topsy-turvy. NPS was imposed on new central government recruits(excluding defence employees) from 1-1-2004 even before the supporting legislation was in place. NPS was kept outside the purview of VI Pay Commission. A study of pension schemes by ING and IIM, Bangalore was commissioned three years after the introduction of NPS. The fund managers were initially made to agree for ridiculously low charges for managing the funds (0.0009% against the prevailing 2% for mutual funds) Thus a hurry in pushing through the scheme rather than the intention to introduce a reasonably reliable and credible social security scheme is evident throughout.
NPS should be more credible and transparent
The story ‘The best pension plan’ was highly informative and helpful. Considering the innumerable pension plans in the country, it is good to see one that is relatively simple and not prone to mis-selling. However a few problems have continued to plague NPS since its launch. Both the introduction and implementation of the scheme have been faulty. The NPS was started for the new central government recruits (excluding defence employees) at the beginning of 2004 even before the supporting legislation was in place. The NPS was kept outside the purview of the Sixth Pay Commission, even as the fund managers were made to agree to ridiculously low charges of 0.0009% for handling the funds, against the prevailing 2% for mutual funds. There seems to be an inordinate hurry to push through the scheme rather than introduce a reasonably reliable and credible social security plan. As the story points out, this is a good scheme and the government must work towards making it simpler and more accessible to investors.
MG Warrier, Mumbai
Note: ET Wealth published the above based on my following online comments, a telephonic conversation in response to an article sent to them on the subject
ET Wealth August 6-13, 2012: Online comments under New Pension Scheme story:
M G WARRIER (MUMBAI)
08 Aug, 2012 09:39 AM
The introduction and implementation of NPS have been topsy-turvy. NPS was imposed on new central government recruits(excluding defence employees) from 1-1-2004 even before the supporting legislation was in place. NPS was kept outside the purview of VI Pay Commission. A study of pension schemes by ING and IIM, Bangalore was commissioned three years after the introduction of NPS. The fund managers were initially made to agree for ridiculously low charges for managing the funds (0.0009% against the prevailing 2% for mutual funds) Thus a hurry in pushing through the scheme rather than the intention to introduce a reasonably reliable and credible social security scheme is evident throughout.
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