'PFRDA bill likely in monsoon session of Parliament'
The pension reforms bill to set up a regulator and give more freedom to subscribers is likely to be tabled in the monsoon session of Parliament, Finance Ministry said.Updated: Aug 05, 2008 19:19 IST
The pension reforms bill to set up a regulator and give more freedom to subscribers for investing their retirement money is likely to be tabled in the monsoon session of Parliament, Finance Ministry sources said on Tuesday.
"Amendments are ready. Hopefully, it would be tabled in the upcoming monsoon session of Parliament," the sources said.
The Pension Fund Regulatory and Development Authority Bill (PFRDA) was introduced by Finance Minister P Chidambaram way back in 2005 to replace the ordinance promulgated in 2004 for setting up the regulator.
The bill was referred to the Parliamentary Standing Committee after the Left parties opposed the legislation. The standing committee recommended the bill with some modifications.
But the amended bill could not be tabled in Parliament due to persistent opposition from the Left.
Pension reforms bill will give more freedom to subscribers to invest their retirement money and invite more players in the sector.
After the left exited as the supporting front to the ruling coalition and the government won the trust vote with support of its new allies, hopes have arisen that the PFRDA bill along with other reform legislations would be tabled in the Parliament.
Two other bills relate to raising of the FDI cap from present 26 per cent to 49 per cent in the insurance sector, and lifting of the voting cap in the private sector banks.
Finance Minister P Chidambaram had recently stated that he would sought support to reforms bills from even those who had voted against the government in the confidence motion.
The Government had appointed D Swarup as the interim pension regulator, PFRDA, way back in 2003.
The Centre has implemented new pension system (NPS) for its employees who have joined the government services since January one 2004, which is now known as interim pension reforms. Under the NPS, the employee has to contribute to his pension fund, matched by employer (in this case, government).
Under the old pension system, pensioners have assured benefits, but under NPS, they have defined contribution.
Most states, barring left-ruled West Bengal, Kerala and Tripura, have also joined NPS, under which employees have been now given freedom to opt for parking 5 per cent of its funds in the stock market and some more portion in the mutual funds.
PFRDA has appointed NSDL as the record keeping agency for the NPS and SBI, UTI Asset Management Company and LIC as fund managers.