The Pension Fund Regulatory and Development Authority (PFRDA) is set to issue guidelines on foreign direct investment (FDI) in the sector, the agency's chairman Hemant Contractor has said.

PFRDA may also allow higher commissions to be given to financial institutions and permit post offices to sign up subscribers for pension plans, reported Moneycontrol.

Among other measures, the proposed guidelines will clarify whether indirect foreign investments in a pension fund by an entity in which a foreign firm has investments should be counted as part of the 49% FDI cap applicable to the sector.

Mr Contractor said that in line with regulations in the insurance sector, FDI in the pension sector would be allowed up to 49%. He said that the crux of the issue is how to compute the 49%. “Whether you take only direct investment, or you take direct and indirect investment, or you take only indirect," he said.

Currently, there are three public sector and five private sector pension fund managers in India — LIC Pension Fund, SBI Pension Fund, UTI Retirement Solutions, Kotak Pension Fund, Birla Sun Life Pension Fund, HDFC Pension Fund, ICICI Prudential Pension Fund, and Reliance Capital Pension Fund.

Regarding the proposal for higher commissions, Mr Contractor said that the method of computing remuneration payable to pension fund managers will be different from what exists now. Commenting on the level of remuneration, he said, “It could be higher. Right now it is 0.01%."