PFRDA to Allow 6 Firms To Manage Pension Funds

India, New Delhi

In a bid to foster competition and ensure higher returns to senior citizens, pension regulator PFRDA will allow six companies to manage long-term savings of over 300 million employees in the country.

The new pension system would be started after the interim Pension Fund Regulatory and Development Authority appoints a central record-keeping and accounting agency and pension fund managers by December this year. 

"We will initially allow six pension fund managers, including one PSU," PFRDA chairman Vineeta Rai said on the sidelines of a tax conference of Assocham here. The reason for allowing six players is to encourage competition and ensure higher returns to pensioners, as it was seen in the insurance sector after it was opened up for private players in 1999. 

Leading wealth management companies like LIC, UTI Mutual Fund, ICICI Prudential, HDFC Standard Life, DSP Merrill Lynch, Templeton, Principal-PNB-Vijaya Bank, Birla Sunlife and Aviva are in the race for managing long-term savings of over 300 million people in both organised and unorganised sectors. 

All the players are awaiting final guidelines, which are expected to be spelt out only after the new government assumes office. Rai said the interim regulator will appoint a CRA, which will handle all the data and transactions of employees. 
NSDL, CDSL, UTI ISL, Stock Holding Corporation of India and banks are in the race for the coveted job of CRA. PFRDA had announced a draft guideline and invited public comments for the new regime. "We hope to put in place everything within the next 30 weeks," Rai said.