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Phalguna Jandhyala

New Delhi May 31 The Pension Fund Regulatory and Development Authority (PFRDA) has shortlisted four players — Life Insurance Corporation of India, State Bank of India, UTI AMC and IDBI Capital — to mange the pension funds under the new pension scheme (NPS). Originally, seven players had submitted expressions of interest (EoI) for the role of pension fund managers (PFMs).

"We had laid out stringent norms when the EoIs were invited," Ms Meena Chaturvedi, Executive Director, PFRDA, told Business Line. Those who missed the bus are Canara Bank, PNB and Securities Trading Corporation of India (STCI).

Only financial service providers in which Government has at least 51 per cent stake and manage assets worth Rs 10,000 crore were eligible to submit EoIs.

Those shortlisted will now be issued Request for Proposals on June 11 and will have to respond within 2-3 weeks. "Based on the evaluation, we would finally identify 2-3 PFMs. The whole process is expected to be completed by July 20," she added.

The fund managers will offer alternative products to employees, including risk-free options, under which all funds would be invested in government securities, and share-market linked products with variable returns as well.

As per estimates, about five lakh Central and State government employees have joined the scheme since it came into being on January 1, 2004, leading to accumulation of around Rs 1,700 crore pension fund corpus.

Under the NPS, employees have to contribute 10 per cent of their basic salary and dearness allowance, with a matching contribution from their employer.

More Stories on : Regulatory Bodies & Rulings | Pension Plans

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