India’s pension regulator is allowing pension fund managers to charge their customers higher fees from April 1, 2021, a move that could attract more foreign investment in the sector.
The Pension Fund Regulatory and Development Authority proposed the higher fee structure in a request for proposals issued in 2020. This was to take effect after a new round of licensing for PFMs.
Alongside higher fees, the pension sector is set to get a boost with the FDI cap in insurance raised from 49% to 74%. This is because FDI in pension is linked by the PFRDA Act to FDI in insurance. However, as per PFRDA rules, both direct and indirect ownership have to be considered while calculating the FDI cap.
