The Pension Fund Regulatory and Development Authority (PFRDA) has sought easing of the foreign direct investment (FDI) norms for pension funds so that experienced foreign partners could be roped in by these entities, facilitating more competition in the fledgling segment. Currently, FDI in the sector is capped at 49%, in sync with the ceiling for FDI in insurance, where it was hiked from 26% to this level through an amendment to the relevant Act in 2015 after a legislative\/policy-making process of several years. Later, the department of industrial policy and promotion (DIPP) allowed entities like private banks (where the limit is 74%) to raise FDI up to the sectoral limit for their principal activity for their insurance intermediary business too, subject to the condition that over 50% of their income comes from the core business. But such a leeway is not available to the pension sector. Currently, many pension funds managing the Nation Pension System corpus, namely ICICI Prudential, HDFC Pension, Kotak Mahindra Pension and Birla Sunlife, are arms of the respective banks and insurance firms with substantial foreign investment. So, if the stakes of these firms in their pension funds are counted as 'indirect foreign holding,' then some of them may either have already breached the FDI cap in the pension sector or would do so if they induct a foreign partner with reasonable stakes. PFRDA chairman Hemant G Contractor told FE, \u201c\u201cIf indirect foreign investment is counted, then there could be a breach of FDI limit by some pension fund managers. We require clarity on this from the government.\u201d Currently, eight pension funds manage Rs 2.55 lakh crore NPS corpus, which is projected to grow to Rs 3 lakh crore by end-FY19. When the Insurance Laws (Amendment) Act, 2015, increased FDI to 49% in insurance companies, it also meant that the pension sector could allow an FDI limit up to 49%. Due to lack of clarity on FDI calculation, PFRDA have not been able to formulate regulations to govern foreign investment in the pension sector. Currently, PFMs are allowed to a fund management fee 0.01%. To increase their other income, PFRDA recently allowed PFMs to sell NPS products.