Govt ropes in ADB to analyse failings of National Pension Scheme

Concerned with the low acceptance of the New Pension Scheme (NPS) by the masses,the government has roped in the...

Concerned with the low acceptance of the New Pension Scheme (NPS) by the masses,the government has roped in the Asian Development Bank (ADB) to examine the root cause of its lack of success and recommend changes to catapult the schemes popularity. The scheme,finding it hard get many takers,seems to be in trouble in just four months of its launch.

The ADB has zeroed in on two districts one urban and one rural. They are conducting a detailed study on what is discouraging people from buying pension plans and what they are doing to ensure their financial wellbeing post retirement. ADB is just providing us technical support, said an official on condition of anonymity.

The bank is running pilot projects in Hamirpur (Himachal Pradesh) and Mangalore (Karnataka). The ADB officials have completed surveys in these districts and have submitted the report. The main bottlenecks according to them are lack of awareness about the scheme and a robust distribution system. ADB plans to educate the distributors (points of presence) and people about NPS and also rope in affinity groups to increase the popularity of the scheme, said Pension Fund Regulatory and Development Authority chairman D Swarup.

Touted as the best pension scheme in the country and the most competitive in the world in terms of fund management charges,NPS was thrown open to the private sector on May 1,2009. The scheme,even with its merits,lacks the push of intermediaries and hasnt gained much ground amongst the mainstream. As on August 28,the number of subscriptions stood at 1,486. NPS offers a choice of three asset classes: equities,corporate and government debt.