As per PFRDA guidelines on FDI, the sponsor company of a pension fund can’t breach 49% limit; with Nippon increasing the stake to 75%, the sponsor limit of 49% is being breached
Reliance Capital Pension Fund is giving up its licence for NPS fund management. This has been necessitated due to the Nippon Life and Reliance Capital deal. Nippon Life Insurance of Japan has got into a definitive agreement with Reliance Capital Limited to increase their shareholding in Reliance Nippon Life AMC Ltd to 75%. As per PFRDA guidelines on Foreign Direct Investments, the sponsor company cannot breach the limit of 49%. With Nippon increasing the stake to 75%, the sponsor limit of 49% has been breached.
Reliance Pension Fund was incorporated under the Companies Act, 1956 on 31st March, 2009 and was issued the Certificate of Commencement of Business by the Registrar of Companies on April 24, 2009 and by the PFRDA on April 30, 2009. RCPFL has an authorised share capital of Rs 27 crore and paid up share capital of Rs 25 crore.
As on May 2019, Reliance Capital Pension Fund managed investors assets in Nation Pension System (NPS) worth Rs 296 crore.
“At the very onset, we thank you for the support extended to increase our penetration in National Pension System through our Group Company, Reliance Capital Pension Fund Ltd (RCPFL). In light of this, RCPFL will now cease to act as a Pension Fund Manager from 9th August 2019. By default, the portfolio of the pension fund subscriber will be transferred to LIC Pension Fund,” says a communique from Reliance Nippon Life Asset Management.
All the subscribers will have a window of one month i.e. till 9th September 2019 to choose the new Pension Fund Manager for their portfolio, otherwise, LIC Pension Fund will continue to be their fund manager. This means from August 10 onwards to September 9, a subscriber whose money was managed by Reliance Capital Pension Fund will be managed by LIC Pension Fund. The units will be allotted as per the NAV of the LIC Pension Fund Ltd. The physical statement of transaction pertaining to the transition will be sent to your address registered with CRA.
If no option is exercised by the subscriber within a period of 30 days as mentioned above, it shall be presumed that she has exercised the choice of selection of her Pension Fund as LIC Pension Fund Ltd. Thus, her money keeps getting managed by LIC Pension Fund beyond September 9, the statement said.
The Pension Funds who are appointed by PFRDA include SBI Pension Funds Pvt. Ltd., LIC Pension Funds Ltd., UTI Retirement Solutions Ltd., ICICI Prudential Pension Funds Management Co. Ltd., Kotak Mahindra Pension Fund Ltd., HDFC Pension Management Co. Ltd. and Aditya Birla Sun Life Pension Management Ltd.
The NPS subscribers can login into CRA system and update or change their scheme preference by going through the following steps:
1) The subscriber is required to login to the CRA system (www.cra-nsdl.com) with his/her User ID and IPIN.
2) On successful login, under ‘Transact Online’ menu the subscriber is required to click on the option ‘Change scheme preference’.
3) The subscriber is required to click on Tier Type and provide type of Tier (I or II) in which necessary changes needs to be done, similarly scheme-preference type need to be selected as per subscriber’s preferences.
4) The subscriber is required to click on ‘submit’ button.
5) Post submission, subscribers will get an option to ADD or remove the PFM (pension fund manager), scheme name and its percentage of allocation in case, subscriber chooses active choice.
6) In case subscriber has chosen option of auto choice, option to select the PFM will display.
7) The subscriber is required to confirm the changes in the same screen and an acknowledgement number will be displayed on the screen.
8) The subscriber shall take note of Acknowledgement number for future reference.
9) Once the request is successfully accepted, the same will be processed in CRA system.
10) The existing units (if any) will be redeemed and reinvestment will be done in newly selected PFM.
For those who want to change PFM offline, the subscriber is required to submit Form “UOS S3: Scheme Preference change” to the associated Point Of Presence Service Provider (POP-SP).
The POP-SP will update the details in CRA system. Once updated, the request will be processed in the CRA system. The existing units (if any) will be redeemed and reinvestment will be done in newly selected PFM. Do note that the UOS-S3 form is freely downloadable from the corporate website, ‘www.npscra.nsdl.co.in
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