The newly appointed pension fund managers State Bank of India (SBI), Life Insurance Corporation (LIC), UTI Asset Management Company have decided against any participation of foreign partners for their pension ventures.
However, each of the financial institution which were chosen by Delhi based Pension Fund Regulatory & Development Authority (PFRDA) recently are in the process of forming an exclusive subsidiary for undertaking pension fund business shortly. These companies, which will be initially together entrusted with over Rs 1,500 crore of pension resources, are now planning to start their pension fund management business by January 2008.
Under the existing law, these newly pension fund managers, like domestic insurance players , are allowed to have a 26 % foreign partnership.
?We do not require any foreign partner to run this new business. The business might be new, but we have sufficient expertise to manage the business, as it is all about fund management,?? said a senior SBI official. Senior officials from LIC and UTI AMC also took similar stand on the issue.
The selected players are eagerly waiting further communication from PFRDA about the exact size of the fund each of the players will be asked to manage.
?We expect a bit of competition amongst ourselves in efficient fund management. This may determine further allocation of funds to us,?? said a senior official.
Interim pension fund regulator, PFRDA received technical and commercial bids from the four short listed entities and the final three were for managing the Rs 1,500-crore pension funds of the central and most state government employees. By the end of this year, monies contributed by about five lakh employees of the central government, 19 state governments and some autonomous institutions would be managed by professional fund managers. The pension fund regulator has already appointed National Stock Depository Limited as the central record-keeping agency for pension funds.