Govt mulls 26 per cent FDI cap in pension funds

Also, deduction of defined contribution to the new pension scheme for new government recruits would begin from January 1, 2004, by when the government hopes to put in place a regulator and central registry as well, he added.

He also declared that insurers would be given a chance to get into pension funds right from the accumulation stage.

The Central Registration Authority would basically oversee how much pension contribution was being deducted and where it was being parked, he explained. However, private sector employees would get into the mechanism later after the regulatory mechanism was put together.

Insurance chief executives and industry experts present on the ocassion however said the government was clueless about financial sector “nitty-gritties.” “It has an FDI limit that is totally at variance with every other segment, like 26 per cent for insurance, 49 per cent for banks and 74 per cent for mutual funds — and it intends to allow all of them into pension funds with 26 per cent FDI,” one CEO moaned.