Mumbai, Aug. 11 (ANI): The lack of awareness about the New Pension System (NPS) has resulted in only 1,109 subscribers applying for it by July 31.

The Pension Fund Regulatory Development Authority (PFRDA) rolled out the NPS for all citizens from May 1.

"Initially, when NPS for the private sector was launched, we expected it to grow at a slow pace but it grew at a much lesser pace than expected," ICICI Prudential Pension Fund Management Director-on-Board, Tarun Chugh, told reporters here.

ICICI Prudential Pension Fund Management, which has 49 branches, collected 218 forms, the highest among all 22 POPs.

He added that the lack of tax-benefits for NPS is one of the major reasons for it not picking up.

"At the time of retirement one can withdraw 33 per cent of the contribution and the rest 67 per cent is used for annuity, which is taxed. There should not be any tax at the time of withdrawal," Chugh said.

UTI Asset Management Company Chief Marketing Officer Jaydeep Bhattacharaya, said: "Pension is a push-based product. Lack of adequate provisions to push NPS makes its penetration low."

"Eighty seven per cent of India's workforce does not have a pension plan. There is a need to make them aware about the pension plans.

"As the cost structure of NPS is higher than mutual fund products, it (NPS) needs to find a way to reduce the cost structure," Bhattacharaya added.

Citing no tax benefits on NPS as the main reasons for a low number of people joining the system, an official from another pension fund manager said: "People should feel the necessity to join NPS, which can be generated by giving them adequate tax incentives." (ANI)