LIC approaches PFRDA to reconsider its bid
Having missed out on the list of successful bidders to manage the pension fund for the unorganised sector, LIC Pension Fund has made a request with the Pension Fund Regulatory and Development Authority to consider it to be a part of the fund management process.india Updated: Feb 10, 2009 20:28 IST
Having missed out on the list of successful bidders to manage the pension fund for the unorganised sector, LIC Pension Fund has made a request with the Pension Fund Regulatory and Development Authority to consider it to be a part of the fund management process.
“They have made a request with us but they understand that it is competitive bidding process and only if someone opts out, they will get an entry,” said a senior official at PFRDA. LIC Pension Funds declined to comment on the issue.
“We are willing to enter the unorganised sector,” said H Sadhak, chief executive officer, LIC Pension Funds. “We missed out by one position and are at No 7. If we get an opportunity we will enter that as we are an existing fund manager for the
pension funds for government employees’ and we will match L1 cost of 0.0009 per cent for that fund.”
In case any of the short-listed fund managers moves out or is not appointed by the PFRDA Board, LIC would make the cut.
While Pension Fund management is prestigious, the low cost of fund management does not look feasible for the fund managers.
“NPS is a necessity for India and we want to be a part of it and contribute to make it successful. Cost is one of the aspect and over a long period of time it will turn good from business aspect too,” said Sadhak.
UTI, SBI and LIC that were selected to manage the pension fund for government employees will also have to bring down their fund management charge from 0.03 and 0.05 per cent to 0.0009 per cent. This will impact the cost structure of the fund managers managing the pension fund of government employees.
“It will make things tough for us but we will take prudent measures and readjust our expenses and we won’t compromise on the interest of the investors,” said Sadhak.
First Published: Feb 10, 2009 20:27 IST