Money & Banking

PFRDA’s board okays sponsor licence for Tata Asset, Max Life

KR Srivats New Delhi | Updated on September 21, 2021

Move to take the overall count of pension fund managers to 10

Pension regulator PFRDA’s board has given the nod to award licences to Tata Asset Management Company and Max Life Insurance to become sponsors of a pension fund to manage the National Pension System (NPS).

The letter of awarding licences, however, is yet to be formally sent to both of them, said sources close to the development.

Once the licence-award process is completed, there will be 10 Pension Fund Managers in the country to manage the NPS. It maybe recalled that Tata Asset Management Company was among the 10 applicants who had responded to PFRDA’s Request for Proposal (RFP) for the selection of sponsors of pension funds.

Post the RFP, eight fund managers, including Axis Asset Management (new one), were awarded licences this year. The other seven were the pension arms of SBI, UTI, LIC, ICICI, HDFC, Aditya Birla SunLife and Kotak. All these seven were fund managers of NPS in the erstwhile regime.

Besides throwing open the door to more pension fund managers, the RFP had introduced at least five-fold jump in their fees, making it lucrative to undertake this activity.

The revamp of the pension funds management structure is part of PFRDA’s efforts to position the industry for strong decadal growth that could take the overall assets under management (AUM) of NPS to ₹30-lakh crore by 2030.

Pension AUM

As of last week, India’s pension AUM had crossed the ₹6.5-lakh crore mark. With India’s pension assets growing at a frenetic pace of over 30 per cent, the PFRDA expects the overall AUM at this growth rate to touch ₹30-lakh crore by 2030. By March-end 2022, PFRDA expects pension AUM to touch ₹7.5-lakh crore.

Meanwhile, PFRDA is expected to firm up by this month-end the consultant who will help design a Minimum Assured Return Scheme (MARS) under the National Pension System, said sources.

Published on September 20, 2021

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