The Left parties have no objection to the deployment of pension funds in the stock market so long as the funds are managed by public sector banks and financial institutions.
The Bill envisages an authority to promote old-age income security by establishing, developing and regulating pension funds, to protect the interest of subscribers of pension funds.
Finance Minister Pranab Mukherjee on Monday held a meeting with senior BJP leaders L K Advani, Sushma Swaraj and Yashwant Sinha to discuss these two legislations.
Faced with a deadlock over the Pension Fund Regulatory and Development Authority Bill due to stiff opposition from the Left parties, the government is contemplating to bring a separate Bill on pension funds for private sector employees.
The proposed PFRDA bill, aimed at setting up a regulator and manage a new pension system, will not allow pension schemes to invest their money in individual stocks.
The pension bill is listed in the name of Finance Minister Pranab Mukherjee in the agenda papers of the Lok Sabha for Wednesday.
Fresh differences have arisen between the government and the Left parties over pension reforms that may indefinitely stall the Pension Funds Regulatory and Development Authority Bill.
Amid differences among allies, the government today deferred a decision on the changes in the crucial Pension Fund Regulatory and Development Authority Bill, 2011.
Bowing to the pressure of Left parties, the government on Wednesday referred the Pension Fund Regulatory and Development Authority Bill to Parliamentary Standing Committee on Finance.
After years of waiting, finally there seems to be hope for the passage of the Pension Fund Regulatory and Development Authority Bill, thanks to the Left's withdrawal of support from the government. The passing of the Bill will provide statutory backing to the regulatory agency, enabling it to issue guidelines and allow non-government employees to save for the long-term. PFRDA Chairman D Swarup spoke to Business Standard about the issues involved.
Under the NPS, every subscriber will have an individual pension account, which will be portable across job changes.
Turning down the suggestion of Parliamentary Standing Committee, the Union Cabinet also decided that there would be no guarantee of assured returns on schemes by pension funds.
The Pension Fund Regulatory and Development Authority Bill, 2011, provides for market based returns and wide coverage based on several investment options in the pension sector with an aim to building confidence in the subscribers.
Finance Minister P Chidambaram has announced that the government will soon notify an interim investment pattern for pension funds, pending the passage of the Pension Fund Regulatory and Development Authority Bill in Parliament.
The pension fund managers distribute products under the National Pension System.
The long-awaited Pension Bill to set up a regulator and manage the new pension scheme for government employees is likely to come up before Parliament in the forthcoming session beginning May 10.
Finance Minister P Chidambaram on Tuesday asked chief ministers to carry forward pension reform as the liabilities of both the Centre and states was expected to cross a staggering Rs 100,000 crore
'Other sectors that manage the savings pools of Indians are giving tough competition to life insurance companies.'
Twenty-six per cent FDI cap in sector is not incorporated in Bill as govt retains flexibility.
The revised bill will give statutory powers to interim regulator Pension Fund Regulatory and Development Authority to make it on par with other financial regulators -- Securities and Exchange Board of India, Reserve Bank of India and IRDA.
In the entire month's recess during Parliament's Budget session, said the Bharatiya Janata Party, the major opposition grouping, none from the government spoke to it on any of the major stuck legislation.
A Parliamentary panel that went into a Bill to create a pension fund regulator has favoured 26 per cent FDI in the sector, but found many lacunae in the legislation.
Making a case for reforms in the pension sector, the Economic Survey 2010-11 on Friday said the Parliament should expeditiously clear the long pending PFRDA Bill.
The NSE Nifty ended at 5,132, up eight points. The market breadth was positive. Out of 2,840 stocks traded 1,653 advanced while 1,114 declined.
The Bill -- the Securities and Insurance Laws (Amendment) and Validation, Bill 2010 -- addresses concerns by RBI over its autonomy, by including its Governor as vice-chairman of the joint commission instead of making him just a member.
The finance ministry's proposal to increase equity exposure of non-government provident funds and superannuation funds from 5 per cent to 10 per cent may benefit only the high income group category and subscribers of the New Pension Scheme.
Ask rediffGURU and PF expert Milind Vadjikar your insurance, stocks, mutual fund and personal finance-related questions.
Most insurers aren't comfortable with subscribing to the National Pension System as they see it as competition.
The Left parties' demands of 100 per cent funds being invested in government securities, an unrealistic guaranteed return, deployment of public sector employees as fund managers, refusal to shift to a defined contribution system and of course the standard opposition to FDI of 26 per cent do not offer any constructive solution.
The much-delayed Insurance Bill seeks to raise the foreign investment cap in the sector from 26 per cent to 49 per cent, with a rider that the management control rests in the hands of Indian promoter.
From April 1, subscribers will be able to change investment option & asset allocation twice a year, instead of once. Use greater flexibility offered by pension scheme judiciously.
The Cabinet Committee on Parliamentary Affairs took the decision to extend the session till September 6 at a meeting held in Parliament House.
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