Public sector entities Life Insurance Corporation, UTI AMC, State Bank of India and Punjab National Bank are among the front-runners to become pension fund managers under the new pension system.
The direct and indirect foreign investment in pension funds will not exceed 26 per cent. The Pension Fund Regulatory and Development Authority (PFRDA) recently invited expressions of interest for managers. The last date to apply is May 25, 2007.
The selected sponsors will have to incorporate the pension fund as a separate public sector company in which direct and indirect foreign investment will not exceed 26 per cent.PNB is likely to have US-based Principal Financial Group as the foreign partner.
According to official sources, there will be 2-3 fund managers from the public sector as the scheme at the moment is for central and state government employees. Private fund managers are likely to be allowed after the scheme is made available to other citizens of India in due course.
According to the criteria, a sponsor to be eligible for fund manager must have at least five years of experience of fund management and average assets under management of sponsors must not be less than Rs 10,000 crore.
Read more in The Busienss Standard article.
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