The Hindu Business Line : No need for a separate pension entity: FICCI

The Federation of Indian Chambers of Commerce and Industry (FICCI) committee on insurance and pensions in its paper on pension reforms has suggested that the insurance regulator authority should also regulate pension system.

Further, the proposal for a central regulator authority (CRA) as a single record keeping agency, according to the committee was not advisable as it would lead to inefficiencies and adversely affect the beneficiaries. In its recommendations, the committee has suggested that, "There should be multiple record keeping agencies. The players - pension fund managers (PFM) should choose their record keeping agency directly rather than the same being licensed or registered by regulatory authority."

The committee also suggested that the administration of individual pension accounts should rest with the PFM. Direct contact with customer will enable the PFM to ensure better management and servicing. Besides, within the three funds suggested in the proposed system, the allocations to different investment options should be left to the PFM to decide. "Fund managers should be allowed to take decisions. Broad guidelines can be set by the regulator," they suggested.

Regarding the entry norms, the committee has said: "It should be transparent and there should be no auctioning. Number of participants in pension system should not limited."

The committee was also of the view that life insurers should be allowed to fully participate, both in fund management and in annuities, in pensions business. The life insurance companies and asset management companies should form an independent `trust' organisation to be a player in the market. According to the committee, the tax concessions comparable with other similar financial investment instruments available in the market must be provided.

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