Prajna Capital - An Investment Guide

Private Insurers & Mutual FundsWith Experience Of Long-Term Funds May Take Lead BANKS, insurance companies and mutual funds will soon have the opportunity to manage pension funds. The Pension Fund Regulatory & Development Authority ( PFRDA ) sought applications from entities wishing to float pension funds to manage retirement assets of all Indian citizens, other than government employees already covered under the pension scheme. The criteria set out by PFRDA entitles government institutions, banks, insurance companies and mutual funds to sponsor a pension fund. One important condition is that the sponsor must have at least five years’ experience in running debt and equity funds and should have managed average monthly assets of Rs 8,000 crore for 12 months ending November 30, 2008. Insurance companies, being the only manager of long-term finance, are perhaps best suited to manage pension funds. We are very keen to participate in pension fund management. Among private li...

PFRDA WISHES TO PROTECT INTEREST OF MEMBERS FROM MARKET VOLATILITY FUND managers overseeing the government’s new pension scheme ( NPS ) may be allowed to invest only in stocks that comprise benchmark indices — the 30-share Sensex of the Bombay Stock Exchange and the National Stock Exchange’s 50-stock Nifty — as the pension regulator looks to protect the interests of members from market volatility. The Pension Fund Regulatory Development Authority ( PFRDA ), which will regulate NPS, may issue a direction in this regard, its head. Keeping in mind the recent global financial crisis and the stock market turbulence. It is not prudent to allow fund managers to put people’s money in just any stock without looking at their fundamentals. The NPS will be available to all individuals from April 1, 2009, and is mandatory for all government employees who have joined service after January 1, 2004. While savings under NPS from central and state government employees are expected to rise to Rs 6,000 cr...