Indian entities to manage new pension fund schemes, but Left opposes

Mumbai: Fund managers for the new pension system would be only from Indian entities, the Pension Fund Regulatory and Development Authority (PFRDA) said in an official release said.

The release comes in the wake of reports that foreign and private firms may be allowed to manage pension funds.

The PFRDA has invited applications from public sector entities for appointment of fund managers. Only government-owned companies or public financial institutions in which not less than 51 per cent paid-up share capital is held by the central government or partly by it and one or more state governments, can apply.

The sponsors must have at least five years experience of fund management and average assets under management of not less than Rs.10,000 crore for March 2007. So, even among public sector entities, only those with sufficient experience and financial strength can apply.

The selected entity would have to incorporate the pension fund manager as a separate public sector company.

Direct or indirect foreign investment in the pension fund manager, if any, shall not exceed 26 per cent of its paid-up share capital. This is in accordance with the report of the Standing Committee on Finance, which examined the PFRDA Bill 2005.