With new norms in place, the National Pension Scheme (NPS) scores high on the affordability scale. If all goes as hoped, customers of this scheme will be charged not more than 0.2% per year. Yogesh Agarwal, chairman, Pension Fund Regulatory and Development Authority (PFRDA), in an interview with Aswathy Varughese opens up on challenges and opportunities in the NPS.

Will the NPS be available through mutual fund companies?
As far as the NPS is concerned, insurance or mutual funds companies have no role to play in its distribution or marketing. Insurance companies can be the annuity providers once the person reaches the retirement age. During the accumulation phase, there are no roles left for insurers or mutual fund houses.

Do you think the marketing strategy of the NPS went wrong and it was precisely the reason why it did not take off as expected?
For government employees, it was a mandatory scheme. As far as private sector is concerned, we forgot that it is a voluntary system and we need to push the product. We extended this scheme to private sector thinking that it will take off by its own. Unfortunately, that has not happened and that is precisely why we have relaxed the registration norms for pension fund managers (PFMs). The NPS was not a viable proposition as nobody was marketing it. With the relaxed norms in place, we believe that it will reach out to more people.

How will the relaxation of norms for PFMs help the NPS take off?
Private pension fund managers can support this system by boosting the marketing and distribution of the NPS. Till now, the marketing was completely missing. Now with the new regulations, PFMs will be in a position to choose the distribution network and prescribe the charges. This will allow them to run an economically viable business model subject to an overall cap prescribed us.

Do you think the NPS will become a costly product after changing the charges?
Even if pension managers are free to quote their charges, it’s subject to the overall cap, say, 0.25% or 0.3%. In terms of overall cost estimate we have, per year for customers including all charges, it will not be more than 0.2%. No other financial services industry which is involved in the pension space is giving such a cheap product.

What was the rationale behind restructuring the charge structure?
The rationale behind the revised guidelines is to incentivise the marketing of the product which is beautifully designed to meet the retirement needs of the individual. The revised guidelines specify the role of the PFM in marketing and distribution of this product. They have been given the freedom to choose their distribution network and viable business model. The overall cap on the charges that will be prescribed by the PFM will be soon announced by the government committee. But will not be more than 0.25% per year which still makes the NPS a low-cost product for customers.

What is your take on annuity markets?
Life insurers should turn up as annuity providers of this pension scheme. The terms and conditions for offering annuities for pensioners covered under the scheme are available on our website. But the unfortunate part of the annuity market in the county is 85% of the market is occupied by Life Insurance Corporation (LIC), 10% by SBI life and only remaining 5% is covered by other life insurers.

The NPS system mandates that a minimum 40% corpus has to be utilised for purchasing annuity from one of the six life insurers which were empanelled by the Pension Fund Regulatory and Development Authority (PFRDA). The remaining 60%of the corpus accumulated can be withdrawn.

LIC, SBI Life Insurance, ICICI Prudential Life Insurance, Bajaj Allianz Life Insurance, Star Union Dai-ichi Life Insurance and Reliance Life Insurance are the six annuity providers empanelled by the pension regulator. Going ahead, we expect more life insurers will come forward as annuity providers which will be a positive thing as far as annuity market is concerned.

What will be the changes once the PFRDA bill is passed?
We already have the power what we need. The bill when passed will give us statutory power. This means that if today we have to excise the regulatory power and penalise the player, we have to approach a civil court for that.

Source :  http://www.dnaindia.com

In today's world, a 'green' investment on residential dwellings is no longer considered a luxury. Apart from yielding environmental benefits, homes that invest in green technologies save hard cash for homeowners and open up huge commercial opportunities for businesses.

A green home is defined as one that uses less energy by making efficient use of resources and materials without compromising on occupant comfort. This has been made possible by employing new non-conventional technologies, some of which are already in vogue in commercial establishments.

Homes use up a major portion of their energy supply in airconditioning, heating and lighting. For example, a typical upper middle class family shells out an electricity bill of Rs 7,000-8000 a month. But with the help of new non-conventional tech— namely, geothermal based airconditioning, hot water co-generation and energy-efficient lamps — the household can slash its energy bills by up to 80%.

Geothermal-based AC Systems

A traditional air-conditioner functions by absorbing heat from the room and expelling it into the environment. It uses more power when the outdoor temperature is high (say, 45-49 degrees centigrade) and less when the outdoor temperature is lower (for instance, in September or October).

This effect is put to use by new geothermal based air-conditioning systems to enhance efficiencies of traditional AC systems by more than 60%. The geothermalbased system makes use of the ground (or the soil) to generate cooling for the air-conditioning equipment throughout the year, thus saving energy required for operating ACs. In fact, a geothermal system can help cut your power bill by as much as 80%.

Hot water Systems

Geysers or boilers consume a large amount of electricity. Hot water co-generators that replace the energy-guzzling geysers have made it possible to slash energy consumption by over 80%. The cogen system works on the principle of 100% heat recovery. While geysers offer only 0.7-0.9 Kcal output for every 1 Kcal input, co-gen systems offer over 6-7 Kcal output for every 1 Kcal input. Operating costs with co-gen systems can drop by over 80%.

Efficient Lighting

The third category that consumes a sizable amount of power is lighting. Energy-guzzling lamps and even compact fluorescent lamps not only consume high power but also have shorter lifespan. Newer technologies such as LED, induction and cold cathode fluorescent lamps can replace halogen and incandescent lamps and CFLs, and save 50-90% energy. These new lamps have a lifespan of more than eight years and are free of hazardous elements such as lead or mercury vapor.

So if a 2,000-unit housing apartment complex adopts these three technologies, it can reduce power consumption by 17 million kWh units a year—enough to power three small villages. In money terms, this comes to around Rs 10 crore a year. For the environment, this means a reduction of 26,000 tonnes of carbon dioxide emission, which is equivalent to planting 1.1 million trees.

Imagine the impact if every single apartment complex in the city implements a similar initiative. So it does make perfect sense for every homeowner to go green!

Source : The Economic Times, August 25, 2012