The government can raise the limit of foreign direct investment (FDI) in the pension sector to 74 percent. Sources said that the bill in this regard can be brought in the Monsoon session of parliament. Parliament has approved the legal amendment to increase the FDI limit in the insurance sector from 49 to 74 percent. The Insurance Act, 1938 was last amended in 2015 to raise the FDI limit to 49 percent. This has brought foreign investment of Rs 26,000 crore in this area in five years.
Sources said that amendments to the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013 can be brought in the monsoon session or winter session. Through this, the FDI limit in the pension sector will be increased. Presently, the FDI limit in the pension sector is 49 percent. Sources said that the amendment bill may have a provision to separate the National Pension System (NPS) Trust from the PFRDA.
The powers, functions and responsibilities of the NPS Trust are currently decided under the PFRD (National Pension System Trust) Regulations, 2015. It can be brought under Paramarth Trust or Company Law. The intention behind this is to separate the NPS trust from the pension regulator and manage a competent board of 15 members. Most of these member states will be from the government, as it is their biggest contribution.
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