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.

... contd.