MFs push pension schemes for higher retail participation

Poor retail participation. It's the most commonly problem the mutual fund industry has been highlighting over the past 4 years and players have identified pension schemes as the one big push that could turn the tide.

Waqar Naqvi, CEO, Taurus Mutual Fund says, "I would be surprised if any Mutual Funds is not keen on coming out with schemes which are on pensions, which have long-term money getting locked in and we would be very eager to launch such a scheme."

The only two pension schemes available in the market came into existence 18 and 15 years ago. The UTI Retirement Benefit Pension Plan, launched in December 1994, has assets under management of Rs 800 crore and has been giving returns of 10.44% per annum.

The second, Templeton India Pension Scheme, was launched in March 1997 and has Rs 217 crore as assets under management which has been giving returns of 12.55%. This is a situation SEBI chairman UK Sinha wants to change. But fund houses say they need more clarity on guidelines and these are stuck in a turf war between pension regulator PFRDA and market regulator SEBI.

AP Kurian, Former CEO, AMFI says, “To my knowledge, many fund houses have approached SEBI but it seems a policy decision has not been taken probably because of PFRDA being established. The thought process at that time would have been, the PFRDA would issue the guidelines, based on which SEBI will issue its own guidelines enabling Mutual Funds to launch pension schemes.”

And till these clarifications come through, encouraging words from SEBI will remain just that words and long term investments will remain elusive.

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