New Delhi: The Centre would be urged to push forward with the legislation to allow foreign investment in the pension sector, chairman of the Pension Fund Regulatory and Development Authority D Swarup said on Wednesday.
At present, three state-run funds and a handful of domestic insurance companies offer pension schemes to employees, but the returns are low as they mostly invest in debt. “I do definitely expect the pension bill to be passed this year. Otherwise, the bill will lapse and the entire process has to be started afresh,” Swarup said.
The proposed pensions legislation would allow foreign funds to buy stakes of up to 26 % in pension joint ventures with Indian firms, same as that for insurance firms, he said.
The FDI limit in pensions could be raised to 49 % once it is raised in the insurance sector and new pension funds would be allowed to invest up to 50 % of the subscribers money in equity or equity-linked mutual fund schemes, he added.
Once the bill is passed, a new pension scheme for government workers could be offered to employees in private firms and others,Swarup said.
A bill to reform the pension sector was first introduced in the parliament in 2005 as a cash-strapped government sought ways to reduce its expenditure and ensure higher returns for employees. But the move ran into stiff opposition from the left.
—PTI
