Govt issues EOI for appointment of Pension Fund Mangers

New Delhi, May 21 (UNI) The Pension Fund Regulatory and Development Authority (PFRDA) has issued a Primary Information Memorandum and Expression of Interest (EOI) package for appointment of Pension Fund Managers for the New Pension System (NPS).

The last date for submission of EOI is May 25, 2007, an official release said here today.

The release which gave this information also issued a clarification regarding recent reports in the media that PFRDA proposes to allow foreign and private firms to manage pension funds.

It clarified that PFRDA has invited EOI only from public sector entities for sponsoring pension fund managers.

As per the EOI, only Government entities, such as Central Government companies, and public financial institutions in which not less than 51 per cent paid up share capital is held by Central Government or partly by Central Government and partly by one or more State Governments can apply.

Further, to be eligible, the sponsors must have at least five years experience of fund management and average assets under management of the sponsors must not be less than Rs 10,000 crores for the month of March 2007. Thus, even among public sector entities, only those with sufficient experience and financial strength can apply, the release said, The selected public sector entity would be required to incorporate the pension fund manager as a separate public sector company. Both the sponsor as well as the pension fund manager would, therefore, be in the public sector.

Direct or indirect foreign investment in the pension fund manager should not exceed 26 per cent of its paid up share capital. This is in accordance with the report of the Standing Committee on Finance which examined the PFRDA Bill, 2005.

"Thus, it is clarified that in terms of PFRDA's invitation to submit EOI, no foreign or private firm would be eligible to apply for the pension fund business," the release said.

UNI