In a swift change, the National Pension System (NPS) Trust has decided to restart recovering administrative charges/expenses at 0.005% of the assets under management on a daily accrual basis to meet its expenditure. Just months ago, in late-January, NPS Trust had stopped levying the same charge/fee. The reason for reinstating the charge is not known.
Thankfully, the NPS Trust has not hiked the administrative charges/expenses. Till March 31, 2018, the same charge/fee was 0.01% and from April 2018 onwards it was halved to 0.005%.
Do remember that the NPS Trust monitors various stakeholders in the NPS such as the pension fund managers and Points of Presences (POPs) in the interest of the subscribers. In order to recover the expenses of the trust, the regulator PFRDA allows NPS Trust to levy administrative charges. The charge of 0.005% per annum is on the invested amount.
Remember this cost is recovered daily and will be reflected in the Net Asset Value that you see of PFRDA schemes.
NPS Trust is responsible for taking care of the funds under NPS and is registered owner of all NPS assets. The trust holds an account as NPS Trustee Bank. The NPS Trustee Bank facilitates fund transfers across various entities of NPS system viz. Pension Fund Managers, Annuity Service Providers, subscriber, etc. NPS Trust is being administered by the Board of Trustees, as constituted by PFRDA.
Recently, the NPS Trust decided to do a review of fund performance. The trust is in the process of taking external help for reviewing the existing formats etc. for performance review of the pension funds, review the performance of the PFs at a prescribed interval, and undertake portfolio analysis of all schemes of NPS on monthly basis.
Additional read: NPS Trust To Appoint Consultant For Review Of Pension Fund Performance, Close Monitoring