It looks like the stage is set for pension reforms to finally take off. In a first interaction after the UPA won the trust vote, the pension fund regulator PFRDA has said the government is absolutely ready with the Pension Amendment Bill. The pension bill could be one of the biggest achievements for the finance minister if he manages to push this through and it could happen within two months. This could change the way the pension money of lakhs of government employees is managed and the kind of returns they get since the new law will allow them to invest more of their money in the stock markets as well.
For now all that the regulator needs to do is to rebid inviting private sector fund managers for the New Pension Scheme or the NPS and throwing open the NPS for private citizens, both issues which the Left was vehemently opposed to. As of now funds of only government employees are being managed by LIC, SBI and UTI. However, the bigger question for the regulator is whether government employees will opt for the new schemes since it is a voluntary offer.
At the moment Rs 1500 crore worth of funds of central government employees are already being managed by government owned fund houses and roughly 15 per cent of the monies are going as investment in equities.
Moreover, 19 state governments too have agreed to migrate to the scheme but are yet to transfer the money. Down the line the new pension scheme could also pose a challenge to the pension plans sold by life insurers. And to make this happen the pension regulator is also lobbying for hefty tax breaks.
For now all that the regulator needs to do is to rebid inviting private sector fund managers for the New Pension Scheme or the NPS and throwing open the NPS for private citizens, both issues which the Left was vehemently opposed to. As of now funds of only government employees are being managed by LIC, SBI and UTI. However, the bigger question for the regulator is whether government employees will opt for the new schemes since it is a voluntary offer.
At the moment Rs 1500 crore worth of funds of central government employees are already being managed by government owned fund houses and roughly 15 per cent of the monies are going as investment in equities.
Moreover, 19 state governments too have agreed to migrate to the scheme but are yet to transfer the money. Down the line the new pension scheme could also pose a challenge to the pension plans sold by life insurers. And to make this happen the pension regulator is also lobbying for hefty tax breaks.
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