New pension bill allows 26 per cent FDI; curtains down on assured returns
16 Nov 2011
The government today approved amendments to the Pension Fund Regulatory and Development Authority (PFRDA) Bill 2011, agreeing to allow up to 26 per cent foreign investment in the pension sector and ending the era of assured returns to subscribers.
The bill as such does not specifically state the FDI cap in pension sector and the government plans to bring in foreign investment rules through an executive order. The bill provides enough flexibility for changes in the FDI cap through an executive order.
The union cabinet today approved the changes in the pension fund bill at its meeting today. The bill has already been cleared by the parliamentary standing committee on finance.
The amended PFRDA bill is likely to be taken up for consideration in the winter session of Parliament beginning 22 November.
"The government is of the view that FDI cap in the pension should be at 26 per cent, at par with the insurance sector. However, it would like to retain the flexibility of changing the cap of FDI as and when required and that is why it has not been kept as part of the bill", an official spokesperson said.
The bill does not provide for assured returns to the subscribers of pension schemes.
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