Finance Min may allow 5 pvt funds to manage pensions of govt staff
The Finance Ministry is considering a proposal to allow five private fund managers to manage pension corpus of government employees.
"We have received representation from Pension Fund and Regulatory Development Authority (PFRDA) that the government employees should have same choices of pension fund managers as is available to non-government subscribers," a source said.
The ministry is considering this proposal as there is no reason to deprive the government employees of the same choices both regarding pension fund managers and also the choice of investment pattern as is available to their private sector counterparts, sources added.
Based on the decision taken, sources said, a notification will be issued shortly.
Currently, there are three fund managers for managing pension corpus of government employees. They are LIC Pension Fund Ltd, SBI Pension Funds Pvt Ltd and UTI Retirement Solutions Ltd.
Private sector pension corpus is managed by 8 players including three fund managers who manages the government employees' corpus.
The other five players are HDFC Pension Management Company Ltd, ICICI Prudential Pension Funds Management Company Ltd, Kotak Mahindra Pension Fund Ltd, Reliance Capital Pension Fund Ltd and DSP BlackRock Pension Fund Managers Pvt Ltd.
The National Pension Scheme (NPS), which was introduced by the Central Government in January 2004 for its new entrants and subsequently extended to the private sector in May 2009, has accumulated a corpus of Rs 33,000 crore (as of March 2013) contributed by 50 lakhs subscribers.
Last fiscal, the pension scheme for other than government employee with investment focus on corporate debt generated return of 14.19 per cent while investment in government debt earned 13.52 per cent.
Besides, Swavlamban scheme generated a return of 13.40 per cent.
Pension scheme for Central Government earned a return of 12.39 per cent while the scheme for State Government generated 13 per cent.