The Insurance Regulatory and Development Authority (Irda) committee on pension reforms in its report submitted to the government on Monday has recommended a roadmap to avoid a separate legislation for the business.
Speaking to reporters on the sidelines of the sixth insurance summit organised by the CII, Irda chairman N Rangachary refusing to disclose details indicated that the proposed pension regulatory authority would be within the ambit of Irda and there would no need for separate legislation.
"There will be a course of action by the government to avoid legislation," Rangachary said, adding there is a need for a separate regulator but Irda was competent enough to regulate the pension sector. The need to have a separate pension authority was felt after delays in the passage of the Irda Act and setting up of the insurance regulator.
More From This Section
Although the S A Dave committee had come up with the Old Age Security and Income System (Oasis) months back, the government asked Irda to give final touches to the pension reforms.
Rangachary also said the committee had suggested that the government take a decision on the report within 60 days. He, however, said the report had not prescribed any minimum equity limit for companies intending to enter the pension fund business.
"We have left the equity and other parameters for the regulator to decide," the Irda chairman said. The Dave panel suggested allowing mutual funds into the pension business with a minimum capital of Rs 25 crore.
Finance minister Yashwant Sinha in this year's budget had announced the establishment of a committee to look into the nuances of establishing a pension fund business for the unorganised sector and suggest a roadmap for opening up the sector.
The pension report was prepared by the Irda keeping in view the government's concern over the lack of pension cover to the unorganised sector including people below poverty line and self-employed people, which form the chunk of the services sector.
The Irda chief stressed on pension reforms since the growth in service sector was expected to create a huge market for pension also.
Pointing to Centre's policy of employee-contributed pension system for the new recruit in government services after October 2001, Rangachary said the new generation of government servants would also require pension cover from private companies.