India's pension fund regulator Tuesday said it will push ahead with its planned reforms and have a pension fund operational by July, which will help reduce government liability and provide long-term funds to build the country's infrastructure.
"We have moved far ahead (on reforms in pension sector). We have identified National Securities Depository Ltd. as the central record keeping authority and will soon call bids to appoint fund managers," D. Swarup, chairman of the Pension Fund Regulatory Development Authority, said at a pension seminar.
He said the regulator will appoint three fund managers by the end of May to manage the pension funds of about 500,000 federal and state government employees, who joined the rolls from Jan. 1, 2004.
These employees, who come under the new pension system, will contribute 10% of their basic salary to the pension fund and an equal amount will be given by the government. National Securities Depository will track the pension contributions of these employees, said Swarup.
The government had proposed to introduce a pension bill in parliament more than two years ago, but hasn't been able to move forward due to opposition from its communist allies.
Until the final bill is approved by parliament, neither private pension fund managers nor foreign direct investment will be permitted in the sector.
Swarup said the corpus of the 500,000 employees is estimated at INR17 billion ($396 million) and will be operational by July.
Tuesday, April 10, 2007
Day zero of implementation of the New Pension System
PFRDA has come out with a big announcement: