Pension sector set for full foreign ownership

THE PENSION SECTOR is poised for a structural shift, with the foreign direct investment (FDI) limit set to be raised to 100%, in line with the insurance sector.

- PRASANTA SAHU

The move follows Parliament's approval on Wednesday to increase the FDI cap in insurance from 74% to 100%, a reform aimed at attracting higher foreign capital inflows, enabling the adoption of global governance and innovation standards, and deepening insurance penetration across the country.

Since FDI limits in the pension sector are statutorily linked to those in insurance, the higher cap will automatically extend to pension fund management as well. However, it will require a series of regulatory notifications and guidelines from the Department for Promotion of Industry and Internal Trade (DPIIT), the Reserve Bank of India (RBI) and the Pension Fund Regulatory and Development Authority (PFRDA) before it comes into effect.