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Remya Nair

Mumbai, Dec. 2

SBI Pension Fund has received permission from the Pension Fund Regulatory and Development Authority (PFRDA) to manage the pension money of State Bank of India employees.

Prior to the approval, the fund with a corpus of Rs 15,000 crore, was managed by an in-house trust.

According to sources, initially, SBI PF has been given around Rs 2,000 crore of the total funds to manage. The remaining corpus amount will be gradually transferred to SBI PF. This move will substantially increase the funds under the management of SBI Pension Fund.

However, it is learnt, that the transfer is yet to the approved by the SBI Board.

SBI PF has also been allowed to charge higher rates for managing the pension funds of SBI employees. SBI PF has been permitted to charge 13 paise per Rs 100 (expenses and management fee) for managing pension funds of SBI employees whereas it gets less than one paise per hundred rupees while managing funds under NPS for Government employees.

The same rules and regulations will apply that are applicable to other pension funds. SBI PF will have to invest the funds as per the PFRDA architecture.

The entire SBI employee pension money that is coming to SBI PF will be treated as one subscriber. Therefore, only a single entry will be made by National Securities Depository Ltd (NSDL).

SBI PF is among the three pension fund managers managing funds under the New Pension Scheme for Central and State Government employees. Of the Rs 3,100-crore corpus under the NPS for Central Government employees, SBI Pension Fund manages more than Rs 1,600 crore. This permission will in one go more than double the corpus managed by SBI PF.

It is also one of the six pension fund managers under the NPS for the unorganised sector. The NPS for the unorganised sector has collected around Rs 4.46 crore since its inception in May this year.

Interestingly, another public sector undertaking, National Aluminium Company (NALCO) has joined the New Pension Scheme. Nalco will contribute 6 per cent of its employees basic pay to the scheme. However, Nalco employees will have the flexibility to choose their investment option as the company has joined the NPS for the unorganised sector. As a result, all the Nalco employees will not be treated as one entity by NSDL but separate entries will be made for all of the employees.

Other PSUs are also said to be interested to join the NPS.

More Stories on : Mutual Funds | Regulatory Bodies & Rulings | State Bank of India

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