Four in fray for unorganised sector pension scheme job

The Pension Fund Regulatory and Development Authority (PFRDA) has shortlisted four consultants of which one will be selected to act as the institutional advisor to suggest measures to manage the universal new pension scheme (NPS) for the workforce in the unorganized sector.

The shortlisted companies are Mercer, PriceWaterhouseCoopers, Earnst & Young and Crisil. Earlier the pension fund regulator had appointed an internal committee under Deepak Parekh, chairman, HDFC to help it to implement measures for universal NPS.

Speaking to the reporters on the sidelines of the Pension Fund convention organised by the Indian merchants Chambers (IMC) in Mumbai on Friday, NR Rayalu, managing trustee, NPS Trust, PFRDA, said, ?We had floated a tender in this connection and have already shortlisted the four companies.

Rayulu made it clear that only one out of the four can be assigned the job. As per a study the total unorganised workforce comprised 87.25% of the total workforce in the country.

Informing developments about the NPS which is already in operations for central government employees , Rayulu said that a sum of Rs 1500 crore has already been transferred to all the three fund managers which include LIC Pension Fund, SBI Pension Fund and UTI Retirement Solutions.

As of now, 21 state governments have expressed their will to participate in the new pension scheme (NPS), though none of them has transferred its pension fund so far.

Once the fund is transferred by them, which is likely by the end of the current fiscal, then the entire pension fund would increase to the level of Rs 4,000 crore, said Rayulu.

Asked what kind of retirement asset amount PFRDA was looking at once non-government and retail pension funds also join the NPS within next few months, Rayulu referred to a study which says that asset size may go up to $ 150-450 billion in the peak size which may take 25-30 years from now.

H Sadhak, CEO of LIC Pension Fund, commented that to the present regulations set by PFRDA has contain risk management mechanism to protect investors money . However he felt, that little more can be done

He suggested that there is a need for introducing prudent regulationsto support to support the present quantitative regulations and risk regulation including risk standard, risk monitoring and risk reporting.

He also referred to the presentation turmoil in the global financial market, and said it was not due to the absence of regulation or excess regulation, but due to the financial market activism, more preciously fund management actvitism, and Indian fund manager, particularly Pension Fund Managers need to analyse sriously.

?Well structured corporate governance and business ethics are pre condition for risk management and to achive sufficient risk adjusted return for the investors,” he said.