• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Our Bureau

(From left) Mr N. Rangachary, Chairman, Insurance Regulatory and Development Authority, Mr Greg Brunner, General Manager, Australian Prudential Regulation Authority, and Mr David Lindeman, Principal Analyst, Organisation for Economic Co-operation and Development, at the OECD and International Network of Pension Regulators and Supervisors second Conference on Private Pension in Asia, in Hyderabad on Thursday.

HYDERABAD, May 29

THE Chairman of Insurance Regulatory and Development Authority (IRDA), Mr N. Rangachary, has expressed concern over the low returns on pension funds, largely owing to the falling interest rate regime world over.

At the two-day International Conference on Private Pensions in Asia here on Thursday, jointly organised by IRDA, the Organisation for Economic Co-operation and Development (OECD), Paris, the Institute of Insurance and Risk Management (IIRM) and the International Network for Pension Regulators and Supervisors (INPRS), Mr Rangachary said reluctance on the part of the participants was also adding to the problems of pension funds.

Addressing the delegates from around 17 countries, the IRDA Chief said another issue of concern was the investment guidelines for the pension funds. He hoped that the two-day conference would deliberate over the advantages of administered regime and deregulated environment for investment guidelines.

The Principal Analyst (Pensions) of OECD, Mr David C. Lindeman, said the introduction of defined contribution (DC) schemes was often a significant part of pension reform worldwide. Stating that there were several distinct types of DC programmes, he said the type of DC programme adopted had many implications for the regulators, supervisors, plan members, financial institutions and other pension service providers such as administrators, investment managers, clearing houses and product distributors.

A majority of the speakers and delegates stressed on the principal tasks of private pension regulators and supervisors in ensuring high standards of conduct of private pension providers. They were of the view that pension products were not easy to understand and evaluate, and there existed asymmetric information between consumers and providers. Thus, they said, private pension providers should be required to conduct their business with integrity and due skills. Proper information should be provided to customers to avoid any mis-selling and nurture faith to develop the pensions market.

Acknowledging that the distribution of these complex products also posed other challenges for pension providers, the participants said the product regulation should target at both minimising the costs and meeting the customer needs. The regulations on product design, marketing and market conduct should also pay attention to market conditions that varied from country to country, they said.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Concern over low returns on pension funds

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line