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Informist, Tuesday, Apr. 28, 2026

 

By Sagar Sen and Priyasmita Dutta

 

NEW DELHI – The Pension Fund Regulatory and Development Authority is soon going to seek proposals from prospective pension fund managers to manage the corpus under the National Pension System and Unified Pension Scheme, senior officials in the pension sector regulator said. The 'on tap' registration may open as early as June end, officials told Informist. The regulator had last opened the 'on tap' licensing window in May 2022.

 

According to one of the officials cited above, the pension sector regulator is keen to onboard public sector banks so that their branch network in tier-II and tier-III cities can be utilised to popularise the pension schemes among the masses. "This will increase competition among fund managers and improve investment returns for the subscribers," the official said.

 

The second official said that detailed meetings are being held with the finance ministry, the Reserve Bank of India and some large banks to implement the proposal. "Banks are also enthusiastic about starting with the pension business as this would allow them to provide end-to-end service to their customers. Right from acquiring subscribers from their branches to manage that money without significantly increasing their cost in the process," the second official said.

 

Once allowed to start pension fund operations, this would be the first-time banks will foray into the pension sector after the regulator allowed scheduled commercial banks to set up pension funds independently to manage the corpus under the National Pension System.

 

In January, the PFRDA board had approved a framework allowing scheduled commercial banks to independently set up pension funds to manage pension corpus. "By introducing a clearly defined eligibility criteria based on net worth, market capitalisation and prudential soundness in line with RBI norms, it will ensure that only well-capitalised and systemically robust banks are permitted to sponsor pension funds," a government release had said. This was aimed at addressing regulatory constraints that have limited bank participation in managing pension corpus so far. 

 

Currently, 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.--manage INR 16.5 trillion pension corpus.

 

Though quite a few pension funds are subsidiaries of some of the insurance or asset management company subsidiaries of banks, none of the banks hold any direct stake in any pension fund manager as of now. Though quite a few pension fund managers are promoted by insurance or asset management subsidiaries of some banks, none of the banks hold any direct stake in any pension fund manager as of now.

 

Effective Apr. 1, PFRDA has revised the investment management fee structure for pension funds. It has been increased to 0.12% for corpus up to INR 250 billion from 0.09% for corpus up to INR 100 billion. The fee for managing corpus between INR 250 billion and INR 500 billion is now 0.08%, while for managing assets between INR 500 billion and INR 1.5 trillion, the new fee is 0.06%. For corpus above INR 1.5 trillion, the fee has been increased to 0.04% from 0.03?rlier.  End

 

Edited by Akul Nishant Akhoury

 

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