The long-awaited Pension Bill to set up a regulator and manage the new pension scheme for government employees is likely to come up before Parliament in the forthcoming session beginning May 10.
"In all likelihood, it will come up in the forthcoming Parliament session," a senior finance ministry official said.
The Government has already set up interim Pension Fund Regulatory and Development Authority under the chairmanship of D Swarup and it has been carrying out preparatory work.
Even in case of Market Regulator SEBI and Insurance Regulator IRDA, first an interim body was set up and after the passage of necessary legislations, the regulators were given statutory status.
UPA Government's ally, Left parties have been opposing both PFRDA bill and amendment to IRDA act to raising FDI limit to private insurance players from 26 per cent to 49 per cent.
With assembly elections over in the communist bastion of West Bengal and Kerala by early May, the Government is expected to push the PFRDA legislation in Parliament as all the new Central Government employees from January one, 2004 have been contributing to new pension scheme, besides state Government employees in 16 states.
"The interim pension regulator is not sitting idle and is doing a number of things to streamline the system to be put in place once the bill is passed by Parliament," the official said.
Asked what was being done to money being collected under the new pension scheme, he said it is being deposited in public account which provides eight per cent interest just as in the case of Public Provident Fund.
Once pension funds are set up after the passage of PFRDA legislation, the money would be transferred where it would earn a return offered by pension fund under its various schemes.
The Government favoured switchover to new pension scheme, which has only defined contribution and not defined benefit in the face mounting pension bill which are increasingly becoming unsustainable.
A parliamentary standing committee has already vetted PFRDA legislation and the bill that is being brought will incorporate the committees' recommendations including opening up of pension funds to Foreign Direct Investment.
The FDI cap is expected to be at the same level of Insurance sector, which is now at 26 per cent.
Initially at least half a dozen pension funds would be set up in the country of which at least one would be in the public sector.
The standing committee has suggested that there should at least be one scheme which provide totally risk-free returns by investing the entire pension contribution in government securities.
The standing committee has recommended that there should be provision for withdrawal of the mandatory contributions made by employees to the pension scheme.
The original PFRDA bill does not provide for withdrawals of mandatory contributions.
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