1 min read.Updated: 23 Sep 2021, 11:29 AM ISTLivemint
The formal letter for providing the licence is yet to be issued by the board and might take time as these companies need to adhere to the regulator's guidelines of becoming sponsors
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NEW DELHI :
Tata Asset Management Company and Max Life Insurance can soon become sponsors of a pension fund to manage the National Pension System (NPS). Pension Fund Regulatory and Development Authority's (PFRDA's) board has approved sponsor licences for these companies. However, according to a person aware of the development, the formal letter for providing the licence is yet to be issued by the board and might take time as these companies need to adhere to the regulator's guidelines of becoming sponsors.
Once the process to issue licence gets completed, there will be ten pension fund managers in the country to manage the NPS.
Currently, Aditya Birla Sun Life, HDFC, UTI, SBI, ICICI Prudential, Kotak Mahindra, LIC, and Axis Asset PFMs manage pension assets.
Opening room for pension fund managers aims to take the overall assets under management (AUM) of NPS to around ₹30 trillion in the next 10 years.
Also, the combined AUM of NPS and Atal Pension Yojana increased to 32.91% year-on-year (y-o-y) to touch ₹6.47 trillion by 31 August. On the corresponding date last year, the combined AUM of both schemes stood at ₹4.87 trillion.
Besides, as of the end of August, the total NPS subscriber base was at 45.3 million from 36.5 million in August 2020, showing a y-o-y increase of 24.06%.
NPS is a low-cost investment scheme that allows exposure to equity for up to 75% of the corpus and is rationally tax efficient. On the other hand, Atal Pension Yojana (APY) is a scheme whereby making a periodic contribution today can provide you with a definite pension of ₹1,000- ₹5,000 at the time of your retirement. And further to promote APY, the regulator has recently proposed some modifications in untimely exit rules for APY to expedite timely payment of money to subscribers.