SBI, UTI AMC and LIC to set up companies
NEW DELHI: State Bank of India (SBI), UTI Asset Management Company Pvt. Limited and the Life Insurance Corporation (LIC) are the three successful bidders poised for appointment as pension fund managers for Central and State government employees under a new system that opens the doors to part-investment of the Rs 2,000-crore funds in the stock market.
Apart from these three asset management entities, the Pension Fund Regulatory and Development Authority (PFRDA) shortlisted IDBI Capital for issuance of Request for Proposal (RFP) and directed to submit bids.
Announcing this here on Friday, an official statement said: “Based on the overall evaluation, including technical and commercial parameters, a PFRDA-constituted committee has found SBI, UTI Asset Management Company and the Life Insurance Corporation of India as the three best-value bidders and recommended their appointment as sponsors of pension funds under the new pension system”.
The committee’s report is under PFRDA’s consideration, the statement said.
On appointment, the three entities will have to set up separate companies for starting the process of managing pension funds in the next four to six months. As fund managers, they would be offering alternative products to Central and state government employees. It would include risk-free options under which funds would be invested in government securities as also share market-linked products. This, however, is an interim mechanism till the Pension Reforms Bill — vehemently opposed by the UPA coalition’s Left allies — is passed by Parliament.
As of now, most States except the three Left-ruled States, namely West Bengal, Tripura and Kerala, and a few others, have switched over to the new pension system (NPS). Unlike the old system, the NPS is based on contribution from employees and employers.