Most mutual fund players and life insurance companies are planning to bid for appointment as pension fund managers for all citizens after the Pension Fund Regulatory and Development Authority (PFRDA) today decided to seek expression of interest from prospective fund managers.

According to the eligibility criterion, only players with five years experience and having managed over Rs 8,000 crore in the last 12 months can become sponsors of a pension fund.

Similarly, in case of insurance companies, apart from Life Insurance Corporation, which is already managing funds for central and state government employees, LIC Prudential Life, SBI Life and HDFC Standard Life had more assets under management (AUM) than prescribed.

According to information on company websites, among the old players, Max New York Life, Reliance Life and Tata AIG had lower than Rs 8,000 crore AUM.

But most of them are eligible to bid for the pension business by virtue of a clause that says that one of the joint venture partners should meet the laid-down criteria.

“The criteria laid down by the PFRDA reflect that capability is more important than capital. This is a very viable business and will become lucrative over the years. Insurance companies with joint ventures will bring in their overseas experience,” said Ernst & Young National Leader for Financial Services Ashwin Parekh.

While HDFC Mutual Fund CEO Milind Barve said the company intended to bid for the business, Reliance Asset Management CEO Vikrant Gugnani said, “We are in the process of taking the necessary steps to become a part of this.”

“PFRDA’s eligibility criterion for the expression of interest for the new pension system is a welcome move as our joint venture will be keen on expanding the pension business and insurance can add a lot of business to pension,” said Aegon Religare CEO Rajiv Jamkhedkar.

“Since insurance companies are the only category managing long-term funds, the transition into this area will be smooth,” said ICICI Prudential Executive Vice-President and Chief Investment Officer Puneet Nanda.

“The step will lead to larger participation in the pension area and we will look at the participation soon,” said Max New York Life Corporate Vice-President Manik Nangia.

Apart from being fund managers, there is more business in the offing for insurance companies as on maturity, an investor with a pension fund will have to purchase annuities worth at least 60 per cent of the maturity value.

New Ipad Application :Business Standard's all new IPad App Click here to download for free Other Stories      - Markets end higher led by rate sensitives - New rules to seize property of corrupt babus - BSES gets Rs 5,000-cr IDBI Bank loan to pay dues - Reliance MediaWorks Q3 net loss at Rs 151 cr - Investor wealth grows by Rs 10 lakh cr in 2012 rally

Read Business news in  Advertisements -  Now property search gets more exciting than ever before! -  High Growth Business Opportunities in Africa - Register to explore -  We live for our family. have you secured them? -  Financial Learning now made easier and more convenient. -  Earn fuel worth Rs.2400 with Citi -  India's No. 1 Property Site. Click here to know more.. -  Get 5% cashback on telephone bills with Citi -  Enjoy the journey as much as the destination. click to know more.. -  Exim Bank Conclave on India - Africa Project Partnership. Know more.. -  Be part of it The World's Largest Aircraft. -  Creating Wealth made simple the SIP way. Know more.. -  Only Developer to give a guarantee on time space & rate. -  Office 365 for professionals and small businesses. -  Buy Your Property with Our Triple Guarantee in India. -  Improve Patient Care & Experience. Click here to know more -  Win a Business Class Ticket to Europe..Know more.. -   Introduce a New Automotive Luxury Car.. know more -  Health is Wealth..... Insurance + Savings... Know More...