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| This will be the sole interface between employee contributors and the managers of pension funds.
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| From January 2, new entrants to central government service, except defence forces, will move to a funded pension scheme for which they will make a monthly contribution of 10 per cent from their salary.
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| Along with the National Securities Depository Ltd, the other players expected to make a pitch for appointment as CRA are UTI-ISL, Central Securities Depository Ltd and other smaller record keeping agencies.
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| Speaking at the seminar on pension policy today, U K Sinha, joint secretary (capital markets) in the finance ministry, said the type of arrangement for the interim CRA is being worked out. But he said the process of inviting bids would begin only after the chairman, two whole-time directors and two members of the regulatory authority were appointed.
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| Speaking later, finance ministry consultant Ajay Shah explained that the Centre would transfer the sum to an escrow account with the Reserve Bank of India, which would be allocated later to the various funds the employees choose.
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| Sinha said the pension fund regulator was expected to set an upper limit on the number of pension funds to be allowed to enter the pension market initially. He said this was necessary as only about 1,00,000 people were expected to join the pension scheme in the first couple of years.
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| He said while the authority would have to decide on the entry conditions based on cost of services and capital adequacy of the proposed pension funds, the presence of too many players would distort the market.
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| The joint secretary told the pension summit organised by Invest India Economic Foundation that the regulator would also spell out the foreign direct investment limit and the amount of investments that pension funds would be allowed to make abroad.
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| The new pension schemes will be unit-linked, which means the net asset value of the fund will fluctuate with the day-to-day market price of securities.
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| The new sector is also open for private companies and unorganised sector. Speaking on the occasion, C D Bhave, managing director of NSDL said the fees to be charged by the CRA had to be the minimum to ensure that even small depositors were encouraged to invest.
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Keeping vigil
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Investment guidelines for pension funds yet to be worked out
780 pay and accounts officers of central government to be connected to network
Pension funds expected to keep marketing force small to prune costs for pensioners
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