FDI Limit In Pension Sector Likely To Be Hiked To 100 pc
Last year, Parliament approved a bill to increase the FDI limit in the insurance sector from 74 per cent to 100 per cent. Prior amendments of the Insurance Act, 1938 were done in 2015 following which the FDI ceiling increased from 49 per cent to 74 per cent
New Delhi: The government is likely to hike the foreign direct investment (FDI) limit in the pension sector to up to 100 per cent and a bill in this regard is expected in the next Parliament session. This would align with the insurance sector where up to 100 per cent FDI is permitted, according to the sources.
Last year, Parliament approved a bill to increase the FDI limit in the insurance sector from 74 per cent to 100 per cent. Prior amendments of the Insurance Act, 1938 were done in 2015 following which the FDI ceiling increased from 49 per cent to 74 per cent.
Amendment to Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013 seeking to raise the FDI limit in the pension sector may come in the Monsoon Session or Winter Session depending on various approvals, sources said. Currently, the FDI in pension funds is capped at 49 per cent.
Besides, the sources said that the amendment Bill might contain separation of NPS Trust from the PFRDA. The powers, functions and duties of the NPS Trust, which are currently laid down under the PFRDA (National Pension System Trust) Regulations 2015, may come under a charitable trust or the Companies Act.
The intent behind this is to keep NPS Trust separate from the pension regulator and manage a competent board of 15 members. Out of this, the majority of members are likely to be from the government as they, including states, are the biggest contributor to the corpus. The PFRDA was established for promoting and ensuring the orderly growth of the pension sector with sufficient powers over pension funds, the central record-keeping agency and other intermediaries. It also safeguards the interest of members.