INDIA - Foreign fund managers may be able to get a bite of the massive Indian pensions cherry if new legislation is passed by the government, it has been reported.
Public sector pension funds are to be managed by state-owned banks, mutual funds and financial institutions within India, but a 26% stake would be made available to foreign funds.
Although still unconfirmed, if these proposals are approved by the left wing opposition, who have already disagreed with plans over the New Pension Scheme, they would allow foreign access to pension funds for government and state employees.
President and CEO of T. Rowe Price Global Investment Services, Todd Ruppert, said: "The total pool of pension funds at this moment is not significant, but it will grow."
He added: "It is similar to that in China, where the social security fund has already outsourced to ten asset managers, of which we are one. More of this type of activity will follow over time."
The newly appointed National Securities Depository Limited (NSDL) has reportedly begun preparing the software database and network connectivity needed to manage funds deposited under the scheme.
Bids are to be accepted up to 25 May from companies which have over R100m (US$2.4m) paid up capital.
India’s State Bank (SBI), the nation’s largest lender has announced plans to enter pension fund management to boost its income and has allocated R50m (US$1.2m) for diversification.
SBI also said it was in talks with foreign players and intended to venture into infrastructure, private equity and general insurance.
SBI was recently in a deal to merge seven associate banks to create one of the largest controllers of business volume.
In March, Ajay Shah, a former consultant to the Indian Finance Ministry, reportedly urged India to shift to a partially deregulated pension management industry.
This week's top stories include ITS' management buyout from Mercer, and The Pensions Regulator launching a probe into single-employer defined contribution schemes' default funds.
People retiring in the UK will on average outlive their pension savings by 10 years, according to research by the World Economic Forum (WEF).
Steps to improve auto-enrolment are uncontroversial and obvious, but the government is dawdling on introducing the necessary changes, argues Jack Jones.
Professional trustees will be expected to apply for accreditation as part of a framework intended to be launched on 1 July by the Professional Trustee Standards Working Group (PTSWG).