“Today pension coverage in the unorganised sector is a poor 3-4 per cent and we want to take it to 15-20 per cent in the next two-three years,” Pension Fund Regulatory and Development Authority (PFRDA) Chairman Hemant Contractor told reporters on the sidelines of an event here.
He said the Swavalamban scheme, which is a part of the Jan Dhan Yojana, is likely to bring in more people from the vulnerable sections under the ambit of formal pension system.
Swavalamban is a government’s initiative wherein it co-contributes Rs 1,000 per annum to all eligible pension accounts.
“The Swavalamban scheme will be included in the second phase of the financial inclusion drive .. after this we should be able to see much faster growth in coverage for the unorganised sector,” Contractor said, adding so far, around 36-37 lakh subscribers have opened accounts under the Swavalmban scheme.
He also has asked the government to continue with its contribution of Rs 1,000 for a longer period.
“In the Swavalamban scheme, the government makes a co-contribution of Rs 1,000 and it is valid till 2016-17. So, we have made a request that they should continue (to make investment) for next 20-25 years,” Contractor said.
He said total pension corpus stands at Rs 80,000 crore currently and it can increase further given the large section of the public still uncovered.
To a query over the possibility of merging the two retirement savings-the Employee Provident Fund (EPF) and New Pension Scheme (NPS), he said there is no such proposal.
The regulator is widening the scope and the coverage of the instruments that could be included for investment under the corporate bonds portfolio, he said adding, “I don’t see any appetite for corporate bonds diminishing going forward.”
PFRDA has asked the government to change tax status given to pension scheme and make it at par with EPFO and PPF.
“We currently have a EET (exempt exempt taxed) status and we have asked for a EEE (exempt, exempt, exempt) status like EPF and PPF accounts enjoy. The government is examining it,” Contractor said.