Pension Fund Regulatory and Development Authority (PFRDA) has taken a revolutionary step to make the scope of pension and retirement planning accessible to the common man across the country. Now it is going to be very easy for people living in small towns, villages and remote areas of the country to join the National Pension System (NPS) and start their pension scheme sitting at home. The pension regulator has proposed to make comprehensive changes in the existing rules of Points of Presence (PoPs), under which the traditional form of pension agents is being changed and they are being introduced in a new and modern form. Under this new system, they will now be known as 'NPS Mitra', who will go to every corner of the country to make the general public financially aware and help them open their accounts. This initiative will provide an excellent and easy way for India's unorganized sector, small traders and rural citizens to achieve financial security in old age. What is 'NPS Mitra' scheme and how will the scope of pension change? The main objective of this new initiative of pension regulator PFRDA is to reach out to those areas where till now banking and financial services are either not available or are in very limited quantity. In the traditional system, customers had to travel to big cities or visit banks to open an NPS account or complete the paperwork related to it. But now 'NPS Mitra' will reach customers directly at their doorstep and understand their financial needs. These authorized representatives will explain the benefits of the National Pension System to people in small cities, towns and remote rural areas. Not only this, it will help in adding new investors, filling their forms, completing the KYC process and solving any kind of technical or paper problems that may arise in the future in a jiffy. With the implementation of this new system, common citizens of the country will be able to lay the foundation of a secure future at their homes without any hassle. Historic change in the rules for Points of Presence (PoPs) The regulatory body has also made the rules for PoPs, i.e. those financial institutions and banks that offer NPS services in the market, quite flexible and comprehensive. According to the new proposals, now not only traditional commercial banks, but other non-banking financial institutions, Limited Liability Partnership (LLP), registered societies and cooperative societies will also be able to become 'points of presence'. Along with this, PoPs have been divided into two main categories, the first of which includes physical mode (office based services) and the second of which is completely digital mode (online services). There is no provision of any kind of application fee for the institutions working under digital mode, so that more and more digital platforms can come forward in this field. In contrast, it is proposed to increase the application fee for physical PoP from Rs 10,000 to Rs 25,000, thereby bringing in more transparency and accountability in the entire system. Transparency, Strict Accountability and Strict Rules of Data Privacy Like Adani or any other private service, protecting the interests of customers in financial matters is of paramount importance, keeping this in mind, PFRDA has made stringent security arrangements. According to the new rules, if the customer suffers any kind of financial loss due to the negligence or mistake of any 'NPS Mitra', authorized agent or related institution, then the entire responsibility for the same will be directly on the main institution i.e. PoP. If any irregularities are proved, the concerned institution will have to fully compensate the customer for his loss. Furthermore, it has been mandated to maintain the confidentiality of customers' personal information, documents and their NPS records. No organization or 'NPS Mitra' will be able to share the customer's data with anyone else except as per the mandatory provisions laid down by law. Institutions that will engage customers through digital means will have to maintain a separate 'digital collection account' for each pension scheme, so that every transaction remains completely transparent and secure. Strong vision of providing pension to every citizen of the country. In a huge country like India, where a large part of the population still works in the unorganized sector, it has been a big challenge for them to financially secure their life after retirement. Unorganized sector workers, small shopkeepers, shop employees and daily wage earners or freelancers often have no solid means of regular pension. With this step of the government, the common man living in remote areas of the country will also realize that they can create a strong pension fund through their small savings. People who till now remained away from NPS due to lack of financial literacy and complicated procedures, will now be able to easily join with the help of their nearest 'NPS Mitra'. In the coming time, this scheme will prove to be a milestone in the direction of financial inclusion of the country, due to which every class of citizen will be able to become self-reliant and empowered in old age.
