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A unified pension products regulator is on the anvil consolidating supervisory powers from SEBI, IRDAI where all superannuation products, schemes and corpus of private insurers will be under the single authority in a bid to make long term funds available to the government for infrastructure and growth schemes, said sources.
"The new regulator will only involve pension assigned funds of multiple handlers like IRDAI governs Unit Linked Pension Plans (ULPPs) and annuities. Government Employees' Pension Scheme (EPS) is governed by Employees' Provident Fund Organisation (EPFO) and superannuation funds are managed by either employers or insurance companies, regulated by the IRDA. SEBI regulates retirement funds are managed by Mutual Fund," said the sources.
The proposals were submitted by the Pension Fund Regulatory Authority of India to the finance ministry in December and the inter-ministerial discussions are now over and the decisions will be taken to Cabinet next month, sources added.
The changes however exclude EPFO products. EPFO manages funds worth Rs 15 lakh crore. The amended Act will also see handing over of the management of the NPS trust to the government. The NPS Trust, is currently under PFRDA. NPS has a corpus of Rs 4 lakh crore. Private pension corpus could be around Rs 8 lakh crore and growing, said the sources.
The idea is to consolidate the schemes and products insurance companies and MFs to avoid complexities and different cost for the subscribers (consumers) under one umbrella for their better utilisation, sources in the knowledge however said this is being done where Central government will have access to crores of funds for the infrastructure development and growth schemes from the private insurers as the revenues are drying up on the expected sources -- taxes, disinvestments. Government is banking on the argument that an efficient pension system will make long term funds available for investment especially in infrastructure and economic growth.
Government is eyeing mainly the pension plans corpus of the private insurers offering deferred annuity, immediate annuity, life annuity and national pension schemes. Max Life, Bajaj Allianz, HDFC Life, Reliance ICICI Pru among others.
Recently Finance Minister Nirmala Sitharaman unveiled Rs 102 lakh crore national infrastructure pipeline. India plans to invest about Rs 102 lakh crore in the infrastructure sector in the next five years to achieve the GDP target of $5 trillion by 2024-25, she said.
The finance ministry had set up a task force headed by Economic Affairs Secretary to prepare a roadmap for the national infrastructure pipeline from 2019-20 to 2024-25 under the Rs 102 lakh crore infra plan.