The Centre is likely to appoint a Chairman for the pension regulator in two months and its new board will be operational by end-March, a senior Finance Ministry official said on Wednesday.
The government has invited applications for the post of Pension Fund Regulatory and Development Authority (PFRDA) Chairman, Financial Services Secretary Rajiv Takru said. The last date for applying for the post is December 27.8
“We should have a new PFRDA Chairman in place in the next two months, taking into account all kind of delays which could occur because we need some clearances from agencies,” he told reporters on the sidelines of a CII pension summit.
The Government has selected three whole-time members to be on the PFRDA board. “By the end of the financial year, the Chairman and all (board) members would be in place at the pension regulator,” Takru added.
The search for a new PFRDA chief started after Yogesh Agarwal resigned two weeks ago. Agarwal, whose term was until 2015, was appointed in June 2010.
The Government named Anup Wadhawan, a joint secretary in the Finance Ministry, as interim Chairman of the PFRDA, which became a statutory body after Parliament passed an Act in the monsoon session.
Takru said Agarwal was not asked to resign and he quit citing passage of the PFRDA Act. “I am not sure who asked him (Agarwal) to resign. I have a copy of his resignation and the reason he gave was that since the Act has been passed, the Government may like to appoint a statutory body and therefore he would like to submit his resignation and the government accepted it.”
Talking about the National Pension System (NPS), a retirement savings account, Takru said it has not become popular even after giving good returns. “lack of awareness is one of the reasons why NPS is slow. I think there is some communication gap which needs to be bridged,” he said.
Takru said there was some complacency on the part of pension fund managers in generating higher returns under NPS and he asked them to maximise returns.
On financing infrastructure projects using retirementfunds, Takru said the option would be ideal as pension players are long-term investors. He said the reason for higher non-performing assets (NPAs) in the infrastructure sector was because of peculiar difficulties unrelated to the segment.
“We are saying all NPAs should not be tarred with the same brush. There are NPAs that are completely beyond the control of the promoters, where he has zero per cent responsibility for where he has ended up.
“Only he is taking 100 per cent responsibility for the consequences of that,” the secretary said, adding that such bad assets should be treated separately from NPAs caused by reckless divergence of funds.