The Sensex was at 5,000 when the government proposed switching to a new pension scheme for government employees that would allow investment of 10 per cent in equities. Three years and 16,000 points later, while the government, under pressure from the Left, dithers on that scheme as well as stock investments by the Employees’ Provident Fund Organisation that covers private sector workers, pension funds from across the world are flocking to Dalal Street to cash in on the market.

Consider this: when California Public Employees’ Retirement System (better known as Calpers), one of the world’s largest pension funds, registered as a Foreign Institutional Investor with the Securities Exchange Board of India in July 2004, there were only about a dozen and a half global pension funds active in India.

Now, as many as 152 global pension funds from 18 countries are here and the number is growing fast—46 registered in the last 12 months.

Pension funds now make up for almost 13 per cent of the 1,240-odd FIIs in the country. Last month, Microsoft registered its 401 (K) plan (the US pension system for private sector workers) with SEBI, following the who’s who of the global corporate world who have registered in recent months like Citigroup, JP Morgan Chase, Cargill, Hewlett Packard and Xerox.

Following Calpers’ lead, other states, counties and cities in the US, Canada and UK have also joined the action—in 2007 alone, public employees pension funds were registered from Chicago, Florida, Ohio, New York, Strathclyde, Hartford city, Detroit, Utah, Ontario, Cheshire, Westminster, Colorado, Mississippi and Pennsylvania, among others.

... contd.