"Investment guidelines will be finalised by the middle of the month (April)... May 1 is the date it (pension scheme for all citizens) will be launched," Pension Fund Regulatory and Development Authority (PFRDA) Chairman D Swarup told PTI.

The Authority is set to launch the pension scheme for all citizens from May one after getting nod from the Election Commission. The Deepak Parekh Committee, constituted by the PFRDA, has recommended investment norms for the new pension system (NPS).

The committee had suggested options to subscribers to invest in shares of the 50 stocks of the index Nifty of the National Stock Exchange, government bonds, liquid assets of mutual funds, state government bonds, rated bonds of public financial institutions and public sector companies, among other things.

The PFRDA invited public comments on the recommendations, as well as certain modifications proposed by it to these suggestions.

In August 2008, the government advised the PFRDA to extend the NPS, currently subscribed to by Government employees, to all citizens.  

Central Government employees who joined service on or after January one, 2004, are covered under the NPS. Unlike the old pension scheme, in the NPS both employees and the employer (in this case, government) contributed an equal amount to the pension fund. Twenty-one states have also joined the scheme.

However, the NPS for all citizens will not have any mandatory obligation for employers to give matching contributions to the pension fund.

When asked about the corpus expected from citizens, Swarup said unlike in respect of the central and state governments, this scheme is voluntary and it would be difficult to predict the growth of the corpus.

He, however, pointed out that a survey conducted by an independent organisation, Invest India Micro Pension Services (IIMPS), said that in the next 5 to 7 years, 8 crore people will join the scheme.

By 2025, the corpus will be around $400 billion, including those of central government and state government employees, according to the survey.

When asked whether pension would provide long-term funds for the needs of the economy, Swarup said that the main objective of the scheme is to provide old-age income security.

However, since these are long-term funds, they can be used for long-gestation projects as well, he said.

"But that's a byproduct, so (the) economy will also benefit by the growth of pension funds. Pension funds also lend stability to the capital market, debt market...it creates market for government debt, corporate debt," he added.

Earlier, the interim pension regulator had a plan to launch the new pension system from April one, but it was deferred by the Government, citing the model code of conduct.

Meanwhile, the PFRDA approached the Election Commission to seek permission for launching a scheme and decided to introduce the scheme from May one after getting nod from the Election Commission.

In the meantime, it will educate people about the scheme through advertisements, which will come out in the print media from Saturday.

The PFRDA has already appointed six fund managers -- SBI [Get Quote], UTI Asset Management, ICICI [Get Quote] Prudential Life Insurance, Reliance [Get Quote] MF, IDFC [Get Quote] Mutual Fund and Kotak Mahindra -- for the new scheme.