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Monday, September 16, 2013

NPS: The day after

All of us are delighted that the PFRDA Bill was passed, even though PFRDA will only have a brief life given that the Indian Financial Code is in the pipeline. The original design of the NPS is perfect: individual accounts, portability across employers, centralised recordkeeping, procurement of fund managers through auctions, index funds. The NPS that has been hacked together as a transitional measure has accumulated numerous flaws when compared with this vision.

When the PFRDA Act was passed, I had written a post titled Implications of the Pensions Act. In addition, we have a few good opinion pieces in the Indian newspapers:

That Parliament has enacted the PFRDA Act is not the end of the story of NPS. It is a beginning. We have a B grade NPS in hand, with a large number of accounts. Now that the law is done, it's time to go make a A grade NPS.

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