PFRDA chairman D Swarup told The Indian Express that a committee chaired by HDFC chairman Deepak Parekh to formulate investment guidelines for the pension schemes for private citizens has sought another month to submit its report to the regulator. The original deadline for report submission was November 30. “But the committee, which met last week, has sought another month,” Swarup said.

According to Swarup, work is underway to call for expression of interest (EoI) from a new set of private sector fund managers besides the existing three. “The EoI will be called by mid-December. And in six weeks from then, we will appoint the new pension fund managers,” he said.

The PFRDA had originally hoped to launch the pension scheme for both organised and unorganised sector workers by the first quarter of next calendar year. It has now postponed the launch to April 1, 2009. About 4-5 new pension fund managers would be appointed.

The investment options will include equity, balanced and income pension funds depending on a subscriber’s age and risk-taking appetite. The new investment guidelines will be distinct from those followed by the new pension scheme (NPS) available for government employees.

These will not be constrained by the investment norms of Employees’ Provident Fund Organisation that is applicable to the NPS and caps equity exposure at 15 per cent.

The EoI for new fund managers will detail a two-stage competitive bidding process. After calling for requests for proposals, a shortlist will be based on technical parameters and financial bids. “The selection will be completed by January 31, 2009,” Swarup said.

Since the pension fund managers will not have any direct contact with subscribers for collecting the monthly contribution, the PFRDA is talking to banks and post offices for creating points of presence (PoPs).

“We will prefer banks with nation-wide electronic connectivity first, then rope in post offices,” Swarup said.

Who is benefiting

Only government employees who joined service on or after January 1, 2004, are subscribers to the new pension scheme launched by three state-owned pension fund managers — State Bank of India, Life Insurance Corporation and ITI Mutual Fund.

New players

Work is underway to call for expression of interest from a new set of private sector fund managers besides the existing three. The EoI will be called by mid-December, and six weeks from then, 4-5 new pension fund managers will be appointed

What changes

The new investment guidelines will be distinct from those followed by the new pension scheme available for government employees. These will not be constrained by the investment norms of EPFO that is applicable to the NPS and caps equity exposure at 15 per cent.

Who will benefit

Biggest beneficiaries will be workers in the unorganised sector who do not have a social safety net post retirement. Employees in the organised sector will, for the first time have an investment avenue beyond provident fund