The Hindu : Pension regulator to become functional by Dec.

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Thursday, Aug 07, 2003

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Pension regulator to become functional by Dec.

By Our Special Correspondent

MUMBAI AUG. 6 . The Union Government has decided to kick-start the pension reforms and plans are finalised to set up the pension regulatory authority and Central Record-keeping Agency (CRA) by the end of this year.

Speaking to press persons on the sidelines of a seminar on capital markets here today, U. K. Sinha, Joint Secretary in the Union Finance Ministry, said the Government might relax the minimum number of licences for pension funds from the proposed six. "The minimum number of players need not be six but the final count will be decided by the pension regulator in due course. But the key parameter for allowing private players will be based on the costs for managing these assets. We will announce a set of eligibility criteria for bidding for these licences but the number of licences will be fixed by the regulator,'' he said.

Bids will soon be invited for floating a CRA, which will be the key authority for handling pension accounts. This agency which will essentially work like a depository we have for the stock markets will manage the accounts of individuals which will be done in an electronic format and will function as the main interface with the account holders.

PTI reports:

On tax sops for pension plans, he said contributions and accumulated earnings in the fund are likely to get tax exemption while withdrawals at the end of the tenure would be taxed.

Mr. Sinha said the CRA was also expected to become functional by December 2003 and the depository companies with experience to manage records could be good candidates to act as agency. The CRA would receive contributions for pension accounts, which would later be remitted to fund managers, he said.

Customers would have freedom to chose the fund managers and also move to other manager without any exit load, he added.

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