President Pranab Mukherjee on Friday gave his assent to the Pension Bill, which provides for investment of funds in equity market and opens the sector to up to 26 per cent FDI.
The long-pending Pension Fund Regulatory and Development Authority (PFRDA) Bill was passed by Parliament on September 6.
“The PFRDA Bill, 2013 has received the assent of the President of India,” an official statement said.
The legislation provides subscribers a wide choice to invest their funds including for assured returns by opting for Government Bonds as well as in other funds depending on their capacity to take risk, a provision that came from opponents of the legislation.
It pegs the FDI in pension sector at 26 per cent or such percentage as may be approved for the insurance sector, whichever is higher.
Now the PFRDA has become a statutory authority. Till now, PFRDA was an interim regulator.
PFRDA was established by the government in August, 2003.
Under the law, subscribers of New Pension Scheme (NPS) can opt for minimum return schemes or higher risk based returns on investments.
The corpus of the NPS having 52.83 lakh subscribers (including those of 26 state governments) was about Rs 35,000 crore.
The PFRDA Bill was referred to the Standing Committee twice - in 2005 and 2011.
