A large number of private sector and global companies like Principal of USA, and HSBC too, are keen to grab a share of the Indian pension market, slated to be opened up shortly.
According to the Parliamentary Standing Committee report, at least one PFM has to be from the public sector.
When contacted, interim PFRDA chairman D Swarup said that more PSUs might consider entering the sector, once the PFRDA bill is passed. However, until now, the level of response from the public sector has been lukewarm, he said. He added that if need be, the PFRDA would consider appointing more than one PFM from the public sector.
Meanwhile, the government would now have to study the standing committee report and decide on suggestions which need to be incorporated in the final document. The report said the foreign direct investment (FDI) level in the pension sector could be 26%, as in the insurance sector. Mr Swarup said he expected the global players to take a final call on whether to foray into the pension sector only after the government indicated the FDI limit.
The report has also recommended that an option with 100% investment of pension funds in government securities be provided, in a bid to offer risk-free returns to subscribers.
The committee added that an element of flexibility must be provided to the subscribers. According to the committee, any subscriber should be allowed to take one repayable advance from their accounts upon completion of 15 years of service.