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UTI cuts retirement age to 58

BS Markets Bureau

The Unit Trust of India is reducing the retirement age of its employees from 60 to 58. The new norm, approved by the UTI board on Thursday, takes immediate effect, cutting short the careers of half a dozen senior UTI officials, including senior-most executive director K G Vassal and a few chief general managers like A G Joshi, S S Hedge and P C Gupta.

Another senior executive director who could have been affected by the new norm -- B G Daga -- has already sought premature retirement.

At today's meeting, the board also gave in-principle approval to the Trust to prepare a white paper on its proposed voluntary retirement scheme and allowed the mutual fund to offer performance-related incentives to skilled officers.

"Only a handful of senior officers will be affected by this move. We will give them three months' notice even though the new retirement age takes effect immediately. The lowering of the retirement age will create scope for deserving young officers to go up the ladder fast," UTI chairman M Damodaran said. The new retirement age will not be applicable to class III and IV employees.

Currently, UTI has more than 2,400 employees in 54 offices across the country. The average age of officers --- they roughly account for 50 per cent of the total employee strength -- is around 35 years.

"Deserving candidates will be promoted and given market-related salary through performance-linked incentives," Damodaran said. UTI has seen an exodus of fund managers to private sector mutual funds in the recent past.

Today's meeting also approved the annual audited accounts for all the schemes, including US-64 ended June 2001. Currently, UTI manages 85-odd schemes, including offshore schemes, and has around Rs 575 billion in assets under management.

The report of the corporate repositioning committee was not placed at today's board meeting. "The committee is submitting the report tomorrow. It will be circulated among board members and we will shortly convene a board meeting to take up the report," Damodaran said.

Except for the RBI nominee, all board members attended today's board meeting. For Industrial Development Bank of India chairman PP Vora, it was his first UTI board meeting.

The seven-member committee, headed by YH Malegam, was constituted to revisit the Deepak Parekh panel report on UTI and recommend an appropriate repositioning plan to the board. The other members of the committee include Arvind Virmani, economic advisor, ministry of finance; R P Chitale, managing partner of M. P. Chitale & Co and a trustee of UTI; N S Sekhsaria, managing director, Gujarat Ambuja Cements and also a trustee of UTI; J Bhagwati, joint secretary, ministry of finance, and Cyril Shroff, solicitor and partner of Amarchand & Mangaldas & Suresh A Shroff & Co.

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