PFRDA lets retirement advisors charge 0.02% 'advisory fee', sets Rs1,000 annual limit
24 Sep 2016
The Pension Fund Regulatory and Development Authority (PFRDA) has allowed retirement advisors (RA) under the National Pension System (NPS) to charge an 'advisory fee' of 0.02 per cent on assets under management of existing subscribers, in a move that would help widen pension coverage.
The pension regulator has set the minimum and maximum advisory fees at Rs100 and Rs1,000 per annum.
This will be over and above the on-boarding fee of Rs120 and a fee of Rs20 per transaction or a maximum of Rs100 per annum for subsequent services as stipulated.
However, PFRDA has said the advisory fee can be charged only when a subscriber has signed an agreement with the RA for providing advice, wherein the lower and upper limit of advisory fee as specified by the authority may be incorporated.
Also, the scope of such advice provided by the RA, either oral or in writing, to the subscribers will be limited to asset allocation and choice of pension fund manager (PFM) for their financial assets under NPS or any other scheme regulated by PFRDA.
The PFRDA had recently announced the introduction of retirement advisors (RA), which include any firm, body corporate or an individual who engage in the activity of providing advice on National Pension System or other pension scheme regulated by PFRDA to prospects/subscribers or other persons or group of persons.
The pension regulator had said the role of an advisory entity would be critical in achieving penetration of PFRDA schemes among the masses in order to achieve adequate social security.
This requires ''educating and making people aware of the benefits of the retirement planning and creating awareness about the pension schemes regulated by PFRDA is critical for increasing participation in the voluntary segment of NPS and other pension scheme regulated by PFRDA,'' according to the authority.
