Home >market >stock-market-news >SBI Pension Funds eyes Rs65,000 crore AUM by fiscal end

Mumbai: The largest pension fund manager (PFM) in the country, SBI Pension Funds is looking at achieving its assets under management (AUM) to Rs65,000 crore by the fiscal-end from the AUM at Rs61,000 crore as on 31 December, a top company official said.

“We are looking at achieving our assets under management to Rs65,000 crore by the fiscal-end from the current AUM level of Rs61,000 crore," SBI Pension Funds’ newly-appointed managing director and chief executive Kumar Sharadindu said on Friday.

At present, more than 25,000 branches of SBI group are selling the NPS products as point of presence. All the PoPs get Rs125 for subscription of every NPS subscriber and hence it’s a source of income for the bank too having its branches acting as PoPs.

Also Read| Time to up your equity investment in NPS?

“As of now, I’m encouraging the company’s promoter State Bank of India to spread the message of National Pension Scheme for private sector people to join," he said adding, “SBI group has got a reach in rural and semi-urban areas, where there are lots of non-salaried people who are not in any formal employment anywhere and hence, small savings at their end can make their lives more comfortable on attaining the age of 60 years."

This shall align with government’s objective of moving our country towards a stable pension society, he said. There are seven PFMs in the country at present and the pension fund regulator—Pension Fund Regulatory and Development Authority (PFRDA)—is likely to give its nod to few more PFMs to kick off their operations in the country in near future. Commenting on it, Sharadindu said that larger the number of PFMs, better will be the reach of the NPS products. “We generally feel that the reach of NPS will get wider this way," he said.

Also Read| SBI, LIC pension funds bid lowest for fund management under NPS

Earlier, the management fee was based on whichever PFM would quote the lowest fund management fee, which would then be applicable for all the PFMs. However, PFRDA has now changed the rule of the game.

As per the existing system, the PFMs are charging fee at 0.01% of the fund they manage under private sector. It was sometime back that PFRDA came out with RFP, allowing players to decide fee of their own subject to cap of 0.1%. This is still the lowest fee across the globe for any contributory fund. “Once it happens, it could be low for some, while higher for other PFMs," he said.

Now, it is up to the subscribers to choose the fund manager based on fee structure apart from other performance parameters, he added.

The process towards this new approach has already started. However, it would be implemented once the PFRDA issues a notification in this direction. With overall 38% market share, SBI Pension Funds is the largest among all the seven existing PFMs in the country at present. “While 63% of the private subscribers are with SBI Pension Funds, 35% of the government sector subscribers are also there with us," he said.

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