What are the prospects for pension reform in India – World’s third largest economy?

Finance Minister Pranab Mukherjee on Thursday introduced the Pensions Fund Regulatory and Development Authority (PFRDA) bill, paving the way for long-awaited pension reforms in Asia's third-largest economy.The bill, mainly aims to speed development of the sector and limit the government's pension liabilities.

Let’s shed some light on questions regarding pension reform in India!

WHAT ARE MAIN PROVISIONS IN PENSION BILL?
The pension bill would bring into law a pension system that was introduced under an executive order in 2004 that allows private companies to run federal and state government pension funds, investing part of the cash in Indian stocks and corporate bonds. Up to 50 percent can be invested in equities.
The system would be mandatory for most state employers, while private sector employers and staff would have the option of participating. The only pensions that would remain fully under government control are for the armed forces.
The bill would give the Pension Fund Regulatory and Development Authority statutory powers to regulate and develop the industry.

WILL FOREIGN PLAYERS BE ALLOWED?
The legislation is silent on allowing foreign companies to manage pension funds due to strong opposition from left parties and trade unions, which may disappoint global players eager to manage retirement assets in the world's second most-populous country.

Source: Reuters