The Pension Fund & Regulatory & Development Authority (PFRDA) which has rolled out the new pension scheme (NPS) on Friday to the unorganised sector has also announced the allocation of government pension funds for 2009-10 to be managed by the existing three pension fund managers?LIC Pension Fund, UTI Retirement Benefit Pension Fund and SBI Pension Fund.

In the fresh allocation in 2009-10, LIC Pension Fund?s has seen its share of funds rising from 5% to 29% while UTI Retirement Benefit Pension Fund ?s share has fallen from 40% to 31 %. Similarly SBI Pension Fund?s share has also dipped from 55% to 40% in 2009-10.

Speaking to FE, Pfrda chairman D Swarup confirmed the development. ?Last year we had allocated over Rs 2,100 of government pension kitty to be managed professionally by the fund managers. The new allocation will take place on an incremental basis. The fund allocation was based on the competitive yields that the three fund managers have been able to provide on the funds they have managed,?? he said. The PFRDA has followed mark to market (MTM) method to calculate the final return offered by the fund managers. It has preferred to follow Sebi norms on calculating the yield though EPFO which manages the largest amount of pension money follows yield to maturity (YTM) method for calculating the return for the policy holders. ?We have preferred Sebi norms for mutual funds as EPFO still gets money from the budget to take care of deficits,?? said a top PFRDA official. PFRDA which had selected these three fund managers last year to manage the pension funds of the employees who have joined after 2004.

The NPS architecture has been operational for central government employees for over a year now since April 1, 2008. The three pension funds have generated returns varying from 12 % to 16% on the NPS corpus during the year 2008-09, weighted average return being over 14.5 %,? said PFRDA.The states are at different stages of adopting NPS. In August 2008, the government advised PFRDA to extend NPS, currently subscribed to by government.

Reaching out

• The PFRDA has announced the allocation of government pension funds for 2009-10 to be managed by the existing three pension fund managers?LIC Pension Fund, UTI Retirement Benefit Pension Fund and SBI Pension Fund

• LIC Pension Fund?s share has raised from 5% to 29%

• UTI Retirement Benefit Pension Fund ?s share has fallen from 40% to 31%

• SBI Pension Fund?s share has also dipped from 55% to 40% in 2009-10

• The allocation was based on the competitive yields that the three fund managers have been able to provide on the funds they have managed

• The PFRDA has followed mark to market (MTM) method to calculate the final return offered by the fund managers

• The new pension scheme architecture has been operational for central government employees for over a year now since April 1, 2008