The cabinet has approved the Pension Fund Regulator Bill, reports CNBC-TV18 quoting NewsWire18. The Bill will be tabled in the next session of Parliament.
Among the important suggestions, the Standing Committee on Finance headed by Yashwant Sinha, had favoured 26% cap on foreign direct investment (FDI) in pension programmes. Currently, FDI is not allowed in pension schemes.
The Bill, which was introduced in the Lok Sabha on March 2011, was referred to the Standing Committee for consideration. The government is likely to take up the Bill for passage during the Winter Session of Parliament beginning November 22.
The Committee had also recommended that subscribers to the New Pension System (NPS) should get an assured return on their investments that is at least equal to the interest rate given by the Employees' Provident Fund Scheme.
The NPS, launched in January, 2004, has about 24 lakh subscribers, mostly those employed by the central government.
In India, no pension fund management company offers a guaranteed pension product.
Subscribers to the Employees Provident Fund Organisation (EPFO) get 9.5% interest on their contribution.
The committee wanted the government to make concerted efforts to extend the coverage of the scheme in both the public and private sector. Currently, pension schemes are being monitored by an interim regulator, the PFRDA.
