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Informist, Thursday, Oct. 30, 2025

 

--PFRDA head: Foreign players interested to come in Indian pension sector

--CONTEXT: PFRDA Chairperson Ramann's comments at Business Standard event 
 

MUMBAI – Sensing keen interest from foreign investors to enter India's pension sector, Pension Fund Regulatory and Development Authority Chairperson Sivasubramanian Ramann called for more pension fund managers to set shop. "There is an interest from foreign capital to come in, but I think the interest of foreign capital is more to get returns from India. We probably need to look at how to get more pension funds into the system," he said at Business Standard's BFSI Insight Summit here Thursday.

 

According to the Pension Fund Regulatory and Development Authority Act, 2013, foreign ownership of pension funds is capped at 26% or the prescribed limit for insurance companies, whichever is greater. Tracking the insurance sector, the limit for foreign direct investment in pension funds is currently set at 74%. In the Budget for 2025-26 (Apr-Mar), Finance Minister Nirmala Sitharaman had proposed that the FDI limit for the insurance sector be raised from 74% to 100%. Parliament is likely to soon pass the Insurance Amendment Bill 2025 to enable the change.

 

Currently, there are 10 pension fund managers operating under PFRDA – LIC Pension Fund Ltd., SBI Pension Funds Pvt. Ltd., UTI Pension Fund Ltd., HDFC Pension Fund Management Ltd., ICICI Prudential Pension Funds Management Co. Ltd., Kotak Mahindra Pension Fund Ltd., Aditya Birla Sun Life Pension Fund Management Ltd., TATA Pension Fund Management Pvt Ltd., Axis Pension Fund Management Ltd., and DSP Pension Fund Managers Pvt. Ltd.

 

Though these pension fund managers do not have any direct foreign investment, most of them are being promoted by insurance and mutual fund companies, which in turn have some foreign direct investment.

 

Ramann also said that there is a need to increase financial literacy in the country so that private sector employees realise the need for pension products. "We have this huge challenge of using the existing distribution network. We are sitting on a good architecture, we just have to exploit the animal spirit of the private sector to go out and get that business," he said.

 

"Though it has been 20 years, the ratio of total assets under management, which is roughly about INR 16 trillion, is 75% government subscriber money and 25% others. This is the ratio that probably needs to be reversed and that is really the challenge before PFRDA," he added.  End

 

Reported by Sagar Sen and Krity Ambey

Edited by Vandana Hingorani

 

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