Monday, January 14, 2008

Pension assets in the Indian securities market

Vikas Dhoot has a fascinating story in Indian Express about pension funds and the stock market:

Now, as many as 152 global pension funds from 18 countries are here and the number is growing fast46 registered in the last 12 months.

Pension funds now make up for almost 13 per cent of the 1,240-odd FIIs in the country. Last month, Microsoft registered its 401 (K) plan (the US pension system for private sector workers) with SEBI, following the whos who of the global corporate world who have registered in recent months like Citigroup, JP Morgan Chase, Cargill, Hewlett Packard and Xerox.

Following Calpers lead, other states, counties and cities in the US, Canada and UK have also joined the actionin 2007 alone, public employees pension funds were registered from Chicago, Florida, Ohio, New York, Strathclyde, Hartford city, Detroit, Utah, Ontario, Cheshire, Westminster, Colorado, Mississippi and Pennsylvania, among others.

Apart from regional school employees and teachers pension funds, even the top universities have registered Massachusetts Institute of Technology in March 2007 and Duke University as recently as on January 8.

Countries such as Malaysia, South Korea, Northern Ireland, Australia and New Zealand have, in fact, started investing their national pension funds as well as civil servants pension funds in India. And on May 18, 2007, the Pension fund for members of the European Parliament entered India.

As he points out, it's a fascinating contrast. Myriad pension funds worldwide are now participating in the Indian securities market. But this is not the case for Indian pension assets. Update: Indian Express has an editorial on this.

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