Pension fund money enters Equity markets: Finance Trading Times

Pension fund money enters Equity markets

PFRDA, Pension fund Regulatory and Development Authority, has finally paved the way for a new and much awaited pension scheme, through which the pension fund money can now be invested in the share markets, as per the will and wish of the employee.

SBI, UTI and LIC have been appointed as the Fund Managers for this scheme.

However, initially it will be only the central government employee, a bit more than 3 lakhs in numbers, who will have the option of this scheme. It is expected that 20 billion Rs. will be made available to this scheme by June 2008, which is when this scheme will finally be rolled out.

19 states have accepted to implement this policy, except the states of Left controlled states of West Bengal, Tripura and Kerala.

Initially, the government will be bearing the cost of account and fund management charges, which may later be shifted to the individual as things proceed. There is still no certainty about when will the same scheme be made available to the rest of the pension fund holders, (like EPF contributors working for private organizations). So for the time being, such individuals have to depend upon private retirement plans offered by private banks and fund houses.

The move was much awaited, atleast the developments have taken place.

Link to previous article : Investments, Earnings and Living

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