Pension reform remains among the unfinished agenda of the United Progressive Alliance government in 2009 even as it gave every citizen an option to get an old age safety net for the first time in Indian history.
However, in its second stint at the Centre without the support of the Left, the UPA government mustered enough courage to clear the revised Pension Fund Regulatory and Development Authority Bill, which sources say is likely to be tabled in the Budget session of Parliament.
The revised bill will give statutory powers to interim regulator Pension Fund Regulatory and Development Authority to make it on par with other financial regulators -- Securities and Exchange Board of India, Reserve Bank of India and IRDA.
PFRDA was created by an executive order in 2003 and requires full constitutional powers from the legislation to become full-fledged regulator.
The bill, if passed, will set the stage for foreign direct investment in these funds and will specify a cap for this purpose, unlike the original bill which has kept the issue of FDI cap open ended.
Unlike old pension system for government employees, where only the government contributed to the fund to give assured benefit to its employees, under NPS both employees and the government chip in with matching contributions.
Most state governments, with the exception of the left-ruled West Bengal, Kerala and Tripura and northeast states, have also joined the NPS.
