Well to start with let me say I am learning economics, thus some of my doubts will be mundane and bordering on ridicule. Please accept that as slope of my learning curve.
Post disclaimer here is my doubt.
I worked in a organisation for say 35 years. Every month I paid by subscription to my pension fund. At the time of my separation I started getting my pension on terms which were agreed upon. There was a fixed deduction and now I am getting fixed amount per month.
What will the investor from US will do to better what is already performing as promised?
What will the investor take away at the end of the year?
Since most of the pension funds in India are of government will they allow additional infusion and again what will this money improve?
Please educate me
Thanks.
Sridhar V
I’m not an Economics expert, but I see that some companies (insurance companies or pension funds) who need foreign capital or funds would benefit. The belief is that the investment will enable insurance companies to expand and penetrate in to the large markets in India and similarly they will offer various investment options for deploying pension funds….but its only a belief…..its a matter of debate.
Apart from companies who get capital, the beneficiaries would be consulting or advisory firms who provide consultation on these deals….the Big 4 consulting firms as well as other consultants will provide a lot of services and earn a fee. For common man this might translate to better products, services or choice in the long run.
Rohit Bhardwaj
Thanks Sridhar V. But I have not been able to conceptualize what better things can come my way. Pension funds by the nature of their mandate. have a life span of 50 years or more. I say gave Rs 200 pm for 35 years and now will get Rs 230 per month for say another 15 years. It has to even out. The fund will give a say 10-15% exposure to volatile market> Rest would be invested in government securities.
By getting these FDI what will improve. The monthly contribution of Rs200 will increase to rs 210. as it will have to cater for the additional infrastructure. The pension will decrease from 230 to 210 as the FDI will absorb all the profit.
Rahul Ramchandani
I believe it will help increase the market. Only 20% of the population has been insured!
This number should increase..So the FDI
Sridhar V
Hello Rohit,
You can visit https://pfrda.org.in/ to get more details and updates on it. I’m afraid I’m not able to give you a clear answer to this.
In my view everyone should have their own investment plan in addition to pension contributions. Pension contributions are long term in nature and can be accessed after retirement. So I would suggest you to consider other avenues for investing instead of being only reliant on pensions.