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Confederation of Indian Industry (CII) Director General, Chandrajit Banerjee has welcomed the passage of Pension Fund Regulatory and Development Authority (PFRDA) Bill in the Lok Sabha.
Banerjee said the Bill confers statutory powers on the PFRDA which would strengthen its promotional, developmental and regulatory functions in respect to pension funds in India while also opening up FDI to the pension sector.
He further said the reform will go a long way in increasing the coverage of formal pension and social security plans in India where only around 12% of active workforce has any formal pension or social security plan.
The reform measure would help create a favourable environment to enhance the coverage of pension products in a sustainable manner.
The amendments include that the subscriber seeking minimum assured returns shall be allowed to opt for investing his funds in such scheme providing minimum assured returns as may be notified by the authority;
The amendments also include the foreign investment in the pension sector at 26% or such percentage as may be approved for the insurance sector.
With increasing life expectancy and the changing fabric of traditional family structure, a clear roadmap for deepening of pensions and annuity market remains critical for ensuring old age financial security.
