No fresh investments in equity, ETFs: PFRDA

Also directs funds to restrict exposure to 15% in any single industryA New Delhi (PTI): Tightening its norms for the private sector New Pension System (NPS), the Pension Fund Regulatory and Development Authority (PFRDA) has disallowed fresh investments in equity mutual funds and ETFs from the corpus. Besides, the pension regulator has asked these fund managers to restrict their single industry exposure to 15 per cent of NPS investments under all schemes, among others. PFRDA has issued these clarifications in response to queries received from pension fund managers seeking clarity on certain clauses of the investment management agreement for private sector. "In terms of revised investment guidelines for private sector NPS, fresh investments in equity related Mutual Funds and Exchange Traded Funds (ETF) are disallowed," PFRDA said in a circular dated April 17. As per PFRDA data, the fund Managers allowed to offer NPS include LIC Pension Fund, SBI Pension Funds, UTI Retirement Solutions, ICICI Prudential Pension Funds, Kotak Mahindra Pension Fund and Reliance Capital Pension Fund. As on March, 2013, NPS had a corpus of over Rs 28,400 crore of 44.93 lakh subscribers. Around 2 lakh subscribers are from the private sector while 27 lakh are from central/state governments. Around 15.79 lakh subscribers are served by NPS-Lite, which is designed to ensure ultra-low administrative and transactional costs. New Pension System (NPS), based on defined contributions, is an initiative of PFRDA, the apex body established by Government to regulate and develop the pension sector in the country. On the debt securities front, the regulator said that securities selected for investments should have a minimum residual maturity period of three years from the date of investment by the pension fund manager.