Kothari Pioneer Defers Pension Scheme Launch

Kothari Pioneer Mutual Fund has deferred the launch of its pension scheme slated for yesterday.

This was to be the country first private sector pension scheme.

The deferment has been mainly on account of their inability to procure the permission of the regulator for floating the scheme.

However, company sources are confident of getting the approval from the Securities and Exchange Board of India (Sebi) for next week and are planning to launch it afresh on March 3, 1997.

We are expecting the formal permission from the regulatory authority to come through by tomorrow and would be opening it for the public on March 3 and would keep it open for initial subscription till March 31, said Prem Khatri, who handles marketing at Kothari Pioneer.

Meanwhile, Kothari Pioneer which has already launched its money market mutual fund, the countrys first one, on February 24, is yet to find any takers.

The money market mutual und is expected to close for initial subscription on March 17 1997. Vivek Reddy, chief Executive, ITI Pioneer Asset Management Company, said: We are not expecting too much in terms of inflows in the initial stage.

In fact, the idea is to have a ready-made money market income product in place and fine tune the instrument which would be an on-going process.

Besides there is a lot of education that needs to be done about the product which we have already commenced doing at the intermediary and agents level .

They are currently in the process of talking to several banks for tie-ups, he said.

According to company sources they have set no target for the scheme during the initial period the scheme remains open for subscription.

The money market scheme will re-open for subscription on April 1, 1997.

For the pension scheme which would now open for subscription next week, the general expectation of inflows during the initial period of subscription is in the region of Rs 30 to 40 crore.

The pension scheme remains open till March 31, 1997, which would coincide with timing of filing of tax returns by tax payers, Reddy said.

The scheme offers the benefit under Section 88(xiiib) for the entire Rs 60,000 as also indicating a minimum 14 per cent return and is also useful for investors whose limit under Sec 80 L of the Income Tax Act is not exhausted, he added.

The offer document mentions that the asset management will not charge any fees if the net asset value is lower than Rs 11.40 at the end of the first year.