New Delhi, Oct 15: Finance Ministry today ruled out more than 26 per cent Foreign Direct Investment in pension sector and said fund managers would be selected through a competitive bidding process. "The insurance legislation provides 26 per cent FDI. There will be no change in FDI limit for pension from the insurance sector," Finance Secretary D C Gupta said on the sidelines of a FICCI insurance conference here. Industry sources said the move would be a Dampener to global pension majors. For instance, Principal Finance Group of US wants more than 26 per cent stake in its insurance and pension venture with Punjab National Bank and Vijaya Bank. The US pension giant is awaiting the final guidelines from the interim Pension Fund Regulatory and Development Authority.

Gupta said pension fund managers would be selected through a competitive bidding process. The process is slated to start shortly, he added.
Government intends to allow only serious players with deep-pockets in the pension business.

Although FDI may be capped as it is in the Irda Act, government is slated to allow pension funds to invest in overseas markets.
Bureau Report