Reliance Capital Pension Fund (RCPFL) on Friday ceased to act as pension fund manager. Nippon Life's move to increase its stake in Reliance Nippon Life Asset Management Company (RNam), has led to RCPFL's exit from the National Pension System (NPS).
According to a note by RNam, the sponsor company cannot breach the 49 per cent-mark as per the guidelines of Pension Fund Regulatory and Development Authority (PFRDA). The sponsor limit was getting breached with Nippon Life increasing its stake in RNam to 75 per cent.
"The PFRDA guidelines on foreign direct investment doesn't allow sponsor company to breach the 49 per cent limit. Hence, Reliance Capital Pension Fund has voluntarily offered back the license and will now cease to act as Pension Fund Manager from August 9," said a spokesperson for Reliance Nippon Life Asset Management.
"By default, the portfolio of the pension fund subscriber will be transferred to LIC Pension Fund," the note read.
The portfolio subscribers will be given a window of one-month to choose the new pension fund manager for their portfolio, otherwise LIC Pension Fund will continue to be their fund manager.
The subscribers can choose from SBI Pension Funds, UTI Retirement Solutions, ICICI Prudential Pension Funds Management, Kotak Mahindra Pension Fund, HDFC Pension Management, Aditya Birla Sun Life Pension Management and LIC Pension Fund, if they choose to stick with the latter.