NEW DELHI: The Pension Fund Regulatory and Development Authority (PFRDA) will implement new pension schemes for Central and 19 State government subscribers by appointing central record keeping agencies (CRAs) and four fund managers in the next three months through an executive order route since the PRFDA Bill is still pending in Parliament.

Stating this at a seminar on `Indian pension fund industry: The way forward,' organised by the Associated Chambers of Commerce and Industry of India (Assocham), D. Swarup, Chairman, PFRDA, said the size of the domestic pension business would touch Rs. 2 lakh crore in the next couple of years with new schemes in place.

However, he warned that in the absence of new schemes, the total fiscal stress both on Central and State governments would increase to Rs. 1,60,000 crore from Rs. 75,000 crore annually.

In view of the fiscal stress, Mr. Swarup said, the Finance Ministry had empowered the regulator, through an `executive order,' to appoint CRAs and pension fund managers to cover Central and 19 State government employees under the new schemes for which letters of intent (LoI) had also been invited.

Responding to a suggestion mooted by S. K. Jindal, Chairman, Assocham Expert Committee on Investments, on the number of fund managers, the PFRDA Chairman said four pension funds managers would be drawn from public sector banks and financial institutions.

The regulator had already created an initial corpus of Rs. 1,500 crore for the new pension fund schemes.Mr. Swarup aid that the authority had also recommended to the Finance Minister grant of Rs. 20,000 to 30,000 worth of investment incentives to new pension fund subscribers to develop this sector, thereby taking the limits of income-tax exemptions in various schemes from the existing level of Rs. 1 lakh to Rs. 1.20 lakh or Rs. 1.30 lakh.

He regretted that one constituent of the UPA Government had been opposing the Pension Bill despite the fact that the entire UPA Government, besides the Opposition, and 19 States had supported it.

Speaking on the occasion, Director, Oriental Insurance, Sanjeev Chanana, insurance companies should be encouraged to tap the vast pool of the pension market without much regulation.

There were many checks and balances applied on insurance companies tapping the pension fund market and those should be removed forthwith as insurance boards were required to report to the regulatory mechanism on various small issues, he added.

Mr. Jindal wanted opening up of pension schemes to the private sector without any further delay.

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