Daijiworld Media Network – New Delhi

New Delhi, Sep 16: India’s retirement fund regulator, the Pension Fund Regulatory and Development Authority (PFRDA), is considering allowing individual pension houses to offer tailor-made investment plans, potentially reshaping the $175 billion pension sector.

Currently, pensioners have limited flexibility in investment choices, with fund managers like SBI Pension Fund and ICICI Prudential Pension Fund following asset mixes predetermined by the regulator. If approved, fund houses could design bespoke products catering to varied investor preferences and risk appetites, including plans targeting specific demographics such as women.

The proposed change would also allow fund houses to advertise a wider range of potential returns and charge slightly higher fees to cover marketing costs, sources said.

Under the National Pension System (NPS), pension investments are currently restricted to four asset classes – equity, corporate debt, government bonds, and alternative investment funds – with only a few pre-determined plan options.

The pension sector has been attracting increasing foreign investment, with the FDI limit raised from 49% to 74% in recent years. A PFRDA spokesperson did not respond to a request for comment.