The New Pension Scheme (NPS) did not take off until four years after it was launched because it was not marketed well, Yogesh Agarwal, Chairman, Pension Fund Regulatory Development Authority, said.
“The Government thought that it (NPS) is too hot a product to require marketing,” he said.
Also, there were not many takers for NPS among private employees. This was because it was not made mandatory for them. “That was a mistake. It was because of these reasons that until 2008 the NPS failed to take off,” said Agarwal
Too many restrictions
One more reason why the NPS did not take off was because there were too many restrictions on fund managers. Now, some of these restrictions have been lifted.
Based on the new guidelines, fund managers can choose their own distribution partners and also charge fees while conforming to the overall cap prescribed by PFRDA.
The Chairman said that NPS provides a tremendous opportunity to insurance companies to provide annuity-based schemes to customers. “Seven insurance companies have already signed up to offer annuity services,” he said.