The Centre has asked pension regulator PFRDA to ensure that a full range of investment products, including alternate investment funds (AIFs), are made available for Indians saving for their retirement.

Although the Pension Fund Regulatory and Development Authority has done a wonderful job in establishing a low-cost platform for pensions, there is need to expand the scope of investment avenues for pension monies so that the full range of investment products are available to Indian savers, Jayant Sinha, Minister of State for Finance, said at the PFRDA’s second pension conclave here on Thursday.

“Global investment products should also be available to our savers so that they could diversify and improve the risk-reward ratio on their portfolios.

“They are commonly available to people saving for their retirement around the world. It’s a global practice. We in India should also have it,” Sinha told newspersons on the sidelines of the conclave.

In India, there is a need to recognise that having a set of diversified uncorrelated asset classes pushes out the risk-reward frontier and is really good for people saving for the retirement, Sinha said.

Hemant Contractor, Chairman, PFRDA, told BusinessLine that the pension regulator would soon take a call on allowing AIFs (including venture capital and private equity) as an investment product for pension monies.

A high-level panel headed by former SEBI chairman GN Bajpai had in its recent report recommended that pension monies be allowed in AIFs.

Contractor said that PFRDA will look to allow only those AIFs that are registered with market regulator Securities and Exchange Board of India.

Related Topics
comment COMMENT NOW