CIRCULAR

PFRDA/2013/9/PFM/3

Date: 17-Apr-2013

Sub: Clarifications on Investment Guidelines for Private Sector NPS

In response to queries received from Pension Fund Managers seeking clarification of clauses noted in Schedule – II of the Investment Management Agreement for Private Sector, the Authority has decided to issue the following clarifications which shall take immediate effect and shall remain valid till further orders;

1. In terms of revised investment guidelines for private sector NPS, fresh investments in equity related Mutual Funds and Exchange Traded Funds (ETF) are disallowed.

2. Debt securities selected for investments should have a minimum residual maturity period of three years from the date of investment by the Pension Fund Manager

3. Industry exposure of Pension Fund Manager is restricted to 15% of NPS investments taken together under all NPS schemes i..e Scheme E, C (Tier I & Tier II), CG, SG, NPS Lite, Corporate CG and any further schemes announced from time to time.

4. Investment in equity is restricted to 5% (sponsor group companies) and 10% (nonsponsor group companies) of the market value of paid up equity capital of the company (no. of shares multiplied by price of share), to be read in conjunction with Clause 2.1.2(d) of Schedule II of IMA.

5. Rated asset backed securities (ABS) are eligible securities for investments under Asset Class-C provided they have a residual maturity of not less than three years and have an investment grade rating from at least two rating agencies.

This circular is being issued in terms of resolution issued by MOF (DEA-ECB and PR division) dated 10th October 2003.

Mamta Rohit
(Chief General Manager)

Source: www.pfrda.org.in
[http://pfrda.org.in/writereaddata/linkimages/Clarification%20on%20Invst%20Guidelines9754662988.pdf]

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REQUEST FOR PROPOSAL FOR APPOINTMENT OF BUSINESS REVIEW CONSULTANT (BRC) TO NATIONAL PENSION SYSTEM (NPS) TRUST TO REVIEW THE PERFORMANCE OF THE PENSION FUND MANAGERS NOVEMBER 2012

Click to view the brochure…

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Pension Fund Regulatory and Development Authority
1st Floor, ICADR Building,Plot No.6, Vasant Kunj
Institutional Area, Phase II, New Delhi-11 0070

CIRCULAR

PFRDAICIR/1/Corporate-CG/1

Date: 18th October 2012

SUBJECT: Change in Central Government Investment Model for the Corporate Sector

Under the NPS-Corporate sector model, the Corporates have been provided option to select the Central Govt. Investment model if the investment option is exercised by the corporates for their underlying employees. The subscriber’s contribution is distributed among the three PFMs (S81, LlC and UTI) and the asset allocation replicates the scheme as applicable to the central Govt. employees. (Refer page No-10 of NPS corporate sector brochure)

2. In terms of the PFRDA circular No- PFRDA/CIR/1/PFM/1 dated 31.08.12, with effect from 1st November 2012, the private PFMs will be free to decide the Investment Management Fee within the upper ceiling of 0.25% p.a. prescribed by PFRDA at present.

3. Due to this differential Fee offered by the PFMs from 1st November 2012, a new scheme called ‘Corporate-CG scheme’ will be introduced w.e.f. 1st November 2012. The Scheme will follow the Central Govt. investment guidelines issued from time to time. The salient features will be as under:

a) This scheme will be offered by only public sector PFMs, who have obtained registration under the PFRDA (Registration of Pension Funds for Private Sector) Guidelines – 2012.

b) The system of distribution of funds among three PFMs, as at present, will no longer be available for the corporates under CG scheme and the Corporate will have to choose only one PFM offering this scheme.

4. Existing Corporate Sector Subscribers under the CG Scheme:

a) The existing three public sector PFMs (SBI, UTI & LlC) offering CG scheme will introduce the new scheme ‘corporate-CG scheme’ w.e.f. 1st November 2012 with units of face value of Rs.10.00 and an initial NAV of Rs.10.00 per unit. The funds / assets in the existing CG Scheme in respect of Corporates will be transferred to the new scheme and proportionate units in the new Corporate
CG Scheme will be allotted.

b) The existing corporates under CG scheme are allowed a time period of 60 days from 1st Nov 2012 i.e. up to 31st December 2012 to choose anyone PFM for shifting their assets. Till such times, the fee chargeable to them will be as applicable to the Central Govt. employees, whereafter charges applicable to Pvt. Sector shall be levied.

sd/-
Deepa Kotnis
(General Manager)
(General Manager)

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There are 6.92 crores members under Employees’ Pension Scheme, 1995 as on 31.03.2012. However, to ensure the welfare of the workers who are not benefited by any formal pension scheme, the Government has announced a co-contributory pension scheme the ‘Swalalamban’ whereby the Central Government would contribute a sum of Rs.1,000 per annum in each New Pension System (NPS) account opened having a savings of Rs.1,000 – Rs.12,000 per annum. The Scheme commenced in 2010-11. The Government will provide contribution for 5 years to the beneficiaries who register in the year 2010-11, 2011-12 and 2012-13 and therefore, the scheme has been extended up to the year 2016-17.

A total of 3,01,920 subscribers during 2010-11, 6,43,980 subscribers during 2011-12 and 90,061 subscribers till 30th August, 2012 in the current Financial Year have been enrolled under the Scheme.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Rajya Sabha today.

PIB

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CIRCULAR

PFRDA/CIR/1/PFM/1

Date: 31-08-2012

To,
All Pension Fund Managers,
National Securities Depository Limited
Stock Holding Corporation of India
Bank of India
NPS Trust

Sub: Revision of Investment Management Fee (IMF) for Pension Fund Managers for Private Sector NPS

1. Based on the recommendations of the Expert Committee to determine the Upper ceiling of the Investment Management Fees or other Fees (if any) to be charged by the PFMs in the Private Sector of NPS and with the approval of the Competent Authority, the upper ceiling of the Investment Management Fees has been fixed at 0.25% p.a. of the AUM (Asset Under Management) with effect from 1st November 2012.

2. This is applicable to all schemes for all Private and Corporate Sector subscribers. The PFMs can fix their own Investment Management Fee for different schemes subject to the upper ceiling of 0.25% p.a. This fee is inclusive of brokerage except Custodian charges and applicable taxes.

3. The Investment Management Fee for the NPS Lite / Swavalamban shall be at par with the Investment Management Fee applicable to NPS Schemes for Government Employees which is currently at 0.0102% p.a.

4. The Investment Management Fee applicable to the NPS schemes for Government Employees would continue at 0.0102% p.a which was revised with effect from 18/04/2012.

5. No differential Investment Management Fee can be quoted in a scheme for different subscriber class (For example: professionals, salaried and corporates would all be quoted the same fee if they subscribe to Scheme-E of any specific PFM).

6. Investment Management Fee is to be calculated on the Assets Under Management (AUM) on a daily accrual basis and charged to the scheme at the end of every quarter.

7. The PFMs will be permitted to revise the Investment Management Fee, once in a year.

8. The following disclosure norms need to be followed at the time of revision of fee

(i) PFM to advise its initial fee to PFRDA 30 days prior to commencement of business after obtaining the registration from PFRDA.
(ii) PFMs with existing NPS business to indicate their IMF at the time of submission of their documents to PFRDA for Registration.
(iii) PFM to advise 30 days in advance before the change of IMF, to PFRDA.
(iv) Each change in IMF to be hosted on website of the PFM at least 15 days in advance, and an e-mail to be sent to each subscriber through CRA and notified in an English and Hindi national daily and a vernacular daily where the H.O. of the PFM is situated (15 days in advance) to give sufficient notice to the subscriber.
(v) The annual statement to subscribers by CRA to include all the changes in IMF by the PFM. PFMs to submit this to CRA for this well in advance before the issue of statements.

9. The Investment management fee as revised above would be applicable from 1st November 2012.
This circular is being issued in terms of resolution issued by MOF(DEA-ECB and PR division ) dated 10th October 2003.

Mamta Rohit
(Chief General Manager)

Source: www.pfrda.org.in

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