Pension funds not to assure returns

 Addressing a session on pension funds at an insurance seminar organised by Ficci, UK Sinha, joint secretary in the finance ministry, said such a practice was not followed anywhere in the world.

 He also said the proposed Central Registry Authority (CRA), the record keeper for pension fund investors, would ensure that fund managers do not solicit business.

 According to the plan worked out by the government, fund managers would make available the net asset value of their schemes on a daily basis and subscribers can approach the Central Registry Authority to know the status of their investment and instruct the Authority to transfer them from one fund manger to another.

 Sinha said that powers of portability would be in the hands of the CRA and not with fund managers. He said that banks and post offices, with their wide spread across the country, would be roped in as collection centres or points of presence.

 The Centre proposes to operationalise the contributory pension system for its employees from January 1 and hopes to put in place the Pension Fund Regulatory and Development Authority and the CRA over the next two-and-a-half months.

 Subsequently, fund managers would be selected through a process of global tendering while the regulator would put in place the required rules for the opening up the market.

 Over the next fortnight, the government intends to fix the entry norms before calling for bids from interested pension fund mangers.

 A large number of specialised pension fund mangers are interested in entering the Indian market once the sector is opened up, executives with consulting firms said.

 In addition, insurance companies too want to offer pension products.