New Delhi: Tough opposition from Left parties notwithstanding, the government has opened a window of opportunity for foreign companies for managing pension funds of Central and state government employees.
The foreign funds would be allowed to own up to 26% stake in entities that will be set up by state-owned banks, mutual funds and financial institutions to manage the pension funds, sources told PTI.
The Left parties, which have been opposing the New Pension Scheme that would be based on contribution by the employees, have said that only public sector entities should be entrusted with the task of managing the pension funds.
While the government has conceded this demand, it has allowed for FDI in the entities that will be floated by public sector institutions for the job.
The Pension Regulatory and Development Authority, which has already appointed National Securities Depository Limited as the central record keeping agency, has invited preliminary bids to appoint pension fund managers.
Only financial institutions and banks in which government has at least 51% share and manage assets worth Rs10,000 crore, can apply.
The sources said the public sector financial institutions will, however, have to float separate companies for pension fund business.
These companies, which can have up to 26% FDI stake, would need to have paid up capital of at least Rs10 crore. The last date for submitting expression of interest is 25 May.