Two banks submit applications to start pension funds: PFRDA chairman

PFRDA chief S Ramann said two banks have applied to launch pension funds as regulator expands outreach to smaller cities, explores tech partnerships and plans to allow gold and silver ETF investment

The Pensions Fund Regulatory and Development Authority (PFRDA) chairman S Ramann on Thursday said that two banks have submitted applications to start pension funds.

   

“All the banks are very clear that this is a long-term, very, very, very thriving business. So, pension funds, our trajectory will be very similar to that of developed nations. We have a few very large banks which are not present today. They are all making enquiries. Two of them have even met me giving their applications to start a pension,” Ramann said.

   

At present, there are 10 pension funds registered under PFRDA.

   

How does PFRDA plan to expand pension outreach? 

 

The pension fund is also planning outreach programmes across tier 2 and tier 3 cities and is in discussion with organisations with large databases to popularise pension funds for corporates, MSMEs, SHG groups, platform workers and FPOs.

   

“We are talking to the PhonePes of the world. Saying that, how do we get you to make this popular because most people are using PhonePe, Google Pay, something like that. So, this is where we have to get into technology,” Ramann said.

   

What new investment avenues are being considered? 

 

In addition, he said that pension funds will also be allowed to invest in gold and silver ETFs soon.

   

“Increasing participation means increasing the allocation in the percentage. He had mentioned the possible entry into commodities that also include gold and silver; we should be able to permit it in the next few weeks.”

   

He said that out of a total 5 per cent, 1 per cent will be allowed in these investments.

   

What inflation-linked offerings are expected? 

 

He also said that inflation-indexed products will be launched by the end of the financial year (FY26).