By IANS
New Delhi : The Pension Fund Regulatory and Development Authority (PFRDA) Sunday said fund managers for the new pension system would be only from Indian entities, an official release said in the wake of reports that foreign and private firms may be allowed to manage pension funds.
The PFRDA has called for applications for appointment of fund managers only from public sector entities for sponsoring pension fund managers. Only government-owned companies, public financial institutions in which not less than 51 percent paid up share capital is held by the central government or partly by it and one or more state governments, can apply.
Besides, the sponsors must have at least five years experience of fund management and average assets under management of the sponsors must not be less than Rs.100 billion (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 public sector entity would be required 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 percent 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.