Pension Bulletin September 2015 Volume IV Issue VII

1

INDEX

1. NPS statistics … 2

2. Conferences held during the month … 8

3. Circulars and public notices issued by PFRDA … 8

4. Press Releases … 8

5. Highlights of development in International pension sector – Global

pension assets … 10

6. Economic Outlook and Macroeconomic Statistics … 12

7. Major news clippings on pension schemes of other countries … 15

2

1. NPS statistics

i. NPS-Growth of subscribers and Asset under Management for September, 2015

The number of subscribers under NPS increased by 0.42% during the month of September

2015 supported by 4.59 % growth in unorganised sector and 1.59 % growth in corporate

sector. The AUM under NPS increased by 3.09 % during the month of September 2015. The

highest growth in AUM is witnessed in corporate sector followed by state government. The

subscriber base of newly launched Atal Pension Yojana has increased by 13.26 % during

September 2015 and AUM under APY have increased by 63.93%. The table depicting the

same is as under:

Sector

Number of Subscriber

as on 29 Aug'15

Number of Subscriber

as on 26 Sept'15

% Growth

Over the

month

Assets Under

Management as on 29 Aug' 15 (Rs. cr)

Assets Under

Management as on 26 Sept'15 (Rs. cr)

% Growth Over the month

Central Government

1,560,020

1,568,640 0.55 40,844 41,771 2.27

State Government

2,749,817

2,769,521 0.72 45,51 47,231 3.77

Corporate

409,292

415,820 1.59 6,837 7,106 3.94

UoS

101,072

105,710 4.59 683 702 2.74

NPS Lite*

4,467,968

4,467,898 -0.002 1,818 1,842 1.27

Total

9,288,169

9,327,589 0.42 95,697 98,653 3.09

* Fresh/new registration under NPS Lite has been stopped w.e.f. 01st April 2015

Sector

Number of Subscriber

as on 29 Aug'15

Number of Subscriber

as on 26 Sept'15

% Growth

Over the

month

Assets Under

Management as on 29 Aug' 15

Assets Under

Management as on 26 Sept'15

% Growth Over the month

Atal Pension Yojana 683,296 773,910 13.26 63.26 103.70 63.93

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ii) Share of different sectors in total NPS

Percent share of government subscribers in NPS is 42.9 %. However, share of private sector,

NPS Lite and APY subscribers in total NPS is 5.2 %, 44.2 % and 7.7%, respectively. The AUM

of government sector is 90.1 % against which the share of private sector, NPS Lite and APY is

7.9%, 1.9% and 0.1%, respectively.

Sector wise share of subscribers, corpus and AUM are given in the following table:

(as on 26.09.2015)

iii. Overall Status of State Governments

26 states have joined NPS. Tamil Nadu has already notified but is yet to adopt NPS

architecture. Employees and employers NPS contributions are retained by the state

government instead of passing on to the NPS architecture for management by professional

fund managers as per the investment guidelines prescribed by the Pension Fund Regulatory

and Development Authority. West Bengal and Tripura are yet to notify NPS. As on 26th

September, 2015, Uttar Pradesh has the highest number of subscribers enrolled under NPS

followed by Madhya Pradesh and Chhattisgarh. In terms of assets under management (AUM),

Madhya Pradesh has the highest AUM of Rs.3934.02 crores followed by Maharashtra and

Uttar Pradesh.

State wise position of date of adopting the NPS, number of subscribers, corpus and the

Assets under Management are given in the following table:

Sector Number of Subscribers (% of Total)

Total Corpus (% of Total)

Total Assets Under Management

(% of Total)

Central Government 15.5 39.5 42.3

State Government 27.4 50.0 47.8

Total 42.9 89.5 90.1

Corporate 4.1 7.6 7.2

Unorganized 1.0 0.8 0.7

Total 5.2 8.4 7.9

NPS Lite 44.2 2.0 1.9

APY 7.7 0.1 0.1

Total 51.9 2.1 2.0

Grand Total 100.0 100.0 100.0

4

(As on 26th September, 2015)

S.No. State Govt. Date of

Notification Date of Adoption

Total No. of Subscriber

Contribution (Cr)

AUM (Cr)

1. Andhra Pradesh 22-09-04 1/9/2004 155954 2569.47 2923.04

2. Arunachal Pradesh 17-11-07 1/1/2008 9441 0.56 1.38

3. Assam 25-01-05 1/2/2005 113143 1402.34 1624.41

4. Bihar 31-08-05 1/9/2005 105064 1838.17 2232.92

5. Chandigarh** 11/6/2009 1/1/2004 8912 203.13 244.06

6. Chhattisgarh 27-10-04 1/11/2004 241459 1785.66 2280.27

7. Goa 5/8/2005 5/8/2005 23290 271.08 287.84

8. Gujarat 18-03-05 1/4/2005 105198 1949.72 2333.1

9. Haryana 18-08-08 1/1/2006 105333 2203.75 2697.37

10. Himachal Pradesh 17-08-06 15-05-03 64974 1492.52 1832.49

11. J & K 24-12-09 1/1/2010 74115 757.83 900.76

12. Jharkhand 9/12/2004 1/12/2004 73103 1297.63 1692.96

13. Karnataka 31-03-06 1/4/2006 153269 2879.36 3599.3

14. Kerala 7/1/2013 1/4/2013 26483 102.46 110.26

15. Madhya Pradesh 13-04-05 1/1/2005 305852 3236.22 3934.02

16. Maharashtra 31-10-05 1/11/2005 214994 3386.04 3434.58

17. Manipur 31-12-04 1/1/2005 22933 275.18 316.14

18. Meghalaya 24-03-10 1/4/2010 6256 56.47 64.77

19. Mizoram 17-06-10 1/9/2010 3621 39.44 43.68

20. Nagaland 28-01-10 1/1/2010 12560 29.32 30.14

21. Orissa 17-09-05 1/1/2005 104954 968.43 1150.57

22. Puduchery** 7/3/2005 1/1/2004 9347 317.67 364.12

23. Punjab 2/3/2004 1/1/2004 108518 2177.48 2526.35

24. Rajasthan 28-01-04 1/1/2004 219336 4763.21 5676.5

25. Sikkim 18-05-06 1/4/2006 7862 127.03 147.59

26. Telangana 22-09-04 1/9/2004 111336 1503.53 1877.98

27. Utarakhand 25-10-05 1/10/2005 58611 1260.35 1577.92

28. Uttar Pradesh 28-03-05 1/4/2005 323446 2865.16 3320.78

29. Tamil Nadu 6/8/2003 1/4/2003 0 0 0

30. Tripura* No No 31 0.87 0.97

31. West Bengal* No No 126 4.15 5.12

Total 29 29 27,69,521 39,764.23 47,231.40

* Executed agreement with CRA and NPS trust only for AIS officer ** Chandigarh and Puducherry status is included under the state government Status *** IRA compliance (i.e. submitted all required documents) in State Government is 89.53%

5

iv. Summary of UoS Sector in NPS

65 PoPs with 40,008 service providers are registered with the PFRDA to provide services to

citizens under the NPS. While the registration and contribution upload of government and

government bodies employees is done by their respective Pay & Account offices, the private

and the unorganised sector employees are serviced through the PoPs. As on September 26,

2015, 1,08,022 subscribers have been registered under the private and unorganised sector

other than the NPS Lite and APY. The contribution from unorganised sector as on 26th

September 2015 was Rs. 487 crore against which AUM of the sector was Rs. 567 crore.

Number of subscribers registered under NPS Tier II are 26,003. The contribution received from

Tier II subscriber is Rs. 127 crore and the AUM is Rs. 135 crore.

(As on 26th September, 2015)

a) Total number of registered PoPs 65

b) Total number of registered PoP-SP 40,008

Tier I

c) Total No. of subscribers 1,08,022

d) Total amount of subscribers contribution Rs. 487 Crore

e) Total Asset Under Management Rs. 567 Crore

Tier II

f) Total no. of subscribers 26,003

g) Total amount of subscribers contribution Rs. 127 Crore

h) Total Asset Under Management Rs. 135 Crore

v. Summary of Corporate Sector in NPS Total 1,951 corporates with 4,15,820 subscribers are registered under NPS. The contribution

received from the corporate subscribers as on September 26, 2015 was Rs. 6156 crore

against which the AUM was Rs. 7106 crore.

(As on 26th

September 2015)

a) Total number of corporate registered in NPS 1,951

b) Total number of subscriber registered in Corporate Sector 4,15,820

c) Contribution Rs. 6,156 Crore

d) Total Asset Under Management Rs. 7,106 Crore

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vi. NPS - Lite statistics

Under NPS-Lite, 76 aggregators are registered having a base of 44.68 lakh subscribers. Total

contribution received from NPS Lite subscribers as on September 26, 2015 (excluding

Swavalamban co-contribution by the govt. ) was Rs. 1101 crore and the AUM was Rs. 1842

crore.

(As on September 26, 2015)

a) Total number of Aggregators 76

b) Total number of subscribers registered 44.68 lakh

c) Contribution amount Matched and Booked (Excluding Swavalamban co-contribution by the GoI)

Rs. 1,099 Crore

d) Total Asset Under Management Rs. 1,842 Crore

vii. Atal Pension Scheme statistics The subscriber base of newly launched Atal Pension Yojana has increased from 6.83 lakh in

August 2015 to 7.74 lakh i.e. by 13.26 % during September 2015 and AUM under APY have

increased from Rs. 63.26 crore to Rs.103.7 crore i.e. by 63.93%.

(As on September 26, 2015)

a) Total number of Banks registered under APY 305

b) Total number of subscribers registered 7,73,910

c) Total Asset Under Management Rs. 104 Crore

viii. Returns of pension fund schemes The scheme wise and Pension Fund wise returns during the last one year are given in the following table:

i) One year return (%) (As on 30

th September, 2015)

Pension Funds→ SBI UTI LIC KOTAK RELIANCE ICICI HDFC

Schemes↓ CG 14.11 12.94 12.77

SG 14.52 13.30 13.39

Corporate-CG 14.51 13.60

TIER I

E 0.94 2.00 0.43 1.31 1.17 1.14 1.24

C 13.67 13.24 14.16 13.72 13.56 14.87 13.99

G 16.76 16.07 16.32 15.71 16.35 16.46 16.18

TIER II

E 1.09 3.02 0.58 1.34 1.13 1.14 1.46

C 13.92 13.57 11.53 13.32 13.71 14.69 9.90

G 16.61 16.08 14.94 15.79 16.52 16.41 15.69

NPS Swavalamban 13.92 12.96 12.74 12.96

7

ii) Return (Compound Average Growth Rate) since inception (%)

(As on 30

th September, 2015)

Pension Funds→ SBI UTI LIC KOTAK RELIANCE ICICI HDFC

Schemes↓

CG 10.34 9.83 9.95

SG 9.85 9.90 10.09

Corporate-CG 10.56 10.84

TIER I

E 8.72 11.31 14.90 9.99 10.48 11.58 18.82

C 11.35 9.68 12.69 11.07 9.44 11.25 12.56

G 10.06 8.60 13.60 8.59 8.28 8.88 12.10

TIER II

E 8.16 8.72 9.76 8.79 8.62 8.43 10.93

C 10.93 9.92 9.61 9.52 9.13 11.27 9.44

G 10.29 9.86 14.26 8.35 8.58 9.26 13.20

NPS Swavalamban 11.08 10.99 10.79 11.36

ix. Charge structure for NPS/APY subscribers The service charge structure of intermediaries under NPS & APY is as follows:

Note : * CRA has reduced the charges for NPS Lite subscribers. The PRA opening charges has been reduced from Rs. 35/- to Rs. 15/- and the annual maintenance charge per account has been reduced from Rs. 50/- to Rs. 40/-. Additionally, the charge per transaction which was Rs. 4 per transaction after initial 12 free transactions is free now. The revised charges are applicable w.e.f. 1

st July 2015.

Intermediary Charge Head Service Charges Method of Deduction

Private Govt. Lite/APY

POP (Charge

for each

subscriber)

Subscriber

Registration

Rs. 125 NA NA To be collected upfront

from the subscriber

NPS

Lite/Swavalamban/APY

paid by the Govt.

Transaction

involving a

contribution

0.25% of

contribution, Min.

Rs. 20 Max. Rs.

25000

NA NA

CRA PRA Opening

Charges

Rs. 50/- Rs. 50 Rs. 15/-* Through cancellation of

units. For govt.

subscribers paid by the

Govt.

AMC per account Rs. 190/- Rs. 190 Rs. 40/-*

Charge per

transaction

Rs. 4/- Rs. 4 Free*

Trustee Bank Nil Nil NA

PFM Charges Investment

Management Fee

0.01% p.a. 0.0102% p.a. Through NAV

deduction

Custodian (On

asset value in

custody)

Asset servicing

charges

0.0075% p.a. for electronic segment & 0.05 % p.a.

for physical segment

Through NAV

deduction

8

2. Conferences held during the month

A conference on Atal Pension Yojana (APY) for Banks in Odisha was organized by PFRDA with

the help of NABARD on 04th September, 2015 at Regional Office, NABARD, Bhubaneshwar,

Odisha. The Public Sector Banks, Regional Rural Banks, District Central Cooperative Banks,

State Apex Cooperative Banks and Urban Cooperative Banks in Odisha participated in the

conference.

The objective of the conference was to enhance the role of the Banks in the recently launched

flagship pension scheme of the country Atal Pension Yojana (APY). The scheme provides

minimum Government guaranteed monthly pension to subscribers from Rs 1000-Rs 5000 along

with GoI co-contribution to eligible subscribers for an amount up to Rs 1000 for a period of five

years provided one register by December 2015. All Indian Citizens in the age group of 18-40

years may join the scheme through any bank branch. Shri Hemant G. Contractor, Chairman

PFRDA briefed about the contours of Old Age income security and advised all the participants

to play an active part in outreach of the scheme. The gathering was welcomed by Shri A G Das,

CGM, PFRDA. Shri S K Kale, CGM, NABARD highlighted the importance of adopting APY by

the Cooperative Banks of Odisha and elaborated various facets of financial inclusion. Orissa

State has a population of 4.20 crore and 40% of the population is in the age group of 18-40

years. This demographic dividend of the State provides ample scope for PFRDA to target the

scheme in a more meaningful manner.

3. Circulars and public notices issued by PFRDA during September, 2015

The following circulars and public notices have been issued by PFRDA during September,

2015. The details of the same are available on PFRDA’S website i.e. www.pfrda.org.in

1. Circular dated 01-Sept-2015 on Implementation of the Multilateral Competent Authority

Agreement (MCAA) and Foreign tax Compliance Act (FATCA)

2. Circular dated 07-Sept-2015 on Investment Guidelines for NPS Schemes (Other than

Govt. sector (CG &SG), Corporate CG, NPS Lite & APY) w.e.f 10th September, 2015)

3. Public notice dated 18-Sept-2015 was issued by PFRDA against ‘Saga Trip Marketing

Solution Private Limited’ and ‘DSR Electronics and Financial Services Private Limited’

4. Press Releases

a) Meeting with Chief Secretary, Maharashtra by Chairman, PFRDA

Chairman, PFRDA met Shri Swadheen S Kshatriya, Chief Secretary, Government of

Maharashtra and Secretaries of various departments of the State to solicit their support in

offering the Atal Pension Yojana scheme to the unorganized workforce in the State. The Chief

Secretary evinced interest in the long term benefits of APY and assured the State Government’s

support in all possible ways in reaching out to unorganised workers. The objective of the

meeting was to spread the recently launched flagship pension scheme of the country Atal

Pension Yojana throughout the State of Maharashtra. The scheme provides minimum Govt

guaranteed monthly pension to subscribers from Rs 1000-Rs 5000 along with GoI co-

9

contribution to eligible subscribers for an amount up to Rs 1000 for a period of five years

provided one registers by 31st December 2015. All Indian Citizens in the age group of 18-40

years may join the scheme through any bank branch. Maharashtra State has a population of

11.23 crores and 38% of the population is in the age group of 18-40 years, which provides a

huge opportunity for the scheme. Atal Pension Yojana (APY) can be extended to scheme of

various State Government departments i.e Department of Women and Child Development,

Health Department, Rural Development and Labour Department etc.

b. Meeting with Secretary, Finance, Telangana and other Secretaries by Whole Time

Member (Economics), PFRDA on 18-09-2015.

WTM (Eco), PFRDA met Shri K Ramakrishna Rao, Principal Secretary, Finance department,

Government of Telangana and Secretaries of Women and Child Development department,

Labour department, Health & Family Welfare department, Rural development department and

Panchayati raj department of the State to solicit their support in offering the Atal Pension Yojana

scheme to the unorganized workforce in the State. WTM (Eco) briefed about the features and

benefits of Atal Pension Yojana scheme. The Secretary, Finance evinced interest in the long

term benefits of APY and assured the State Government’s support in all possible ways in

reaching out to unorganised workers.

The scheme provides minimum Govt guaranteed monthly pension to subscribers from Rs 1000

to Rs 5000 along with GoI co-contribution of 50% of the total contribution subject to a maximum

of Rs 1,000/- per annum, for a period of five years to eligible subscribers provided one registers

by 31st December 2015. All Indian Citizens in the age group of 18-40 years are eligible to join

the scheme through any bank branch.

The following points were discussed during the meeting:

i. Publicity for Atal Pension Yojana in local language by the State Government.

ii. Migration of eligible subscribers from Swavalamban to Atal Pension Yojana (APY)

and new enrolments under APY through Society for Elimination of Rural Poverty

(SERP) under Rural Development department.

iii. Enrolments under APY for Anganwadi workers and Helpers under Women and Child

Development department.

iv. Enrolments under APY for Asha workers and Mid Wifery under Health & Family

Welfare department.

v. Enrolments under APY for Building and Other Construction Workers and labourers

under Labour department.

vi. Enrolments under APY for contractual staff, employees and Unorganized Workers

across all departments.

vii. Relooking the existing Pension schemes across State Autonomous Bodies (SABs)

and State Public Sector Undertakings (SPSUs) and working out modalities of

extending notification for NPS wherever applicable.

10

As on date, Telangana State has registered 1,11,212 subscribers from State Government

and State Autonomous Bodies with a total contribution of 1,493 crores. Telangana State has

a population of 3.51 crores and 38% of the population (1.35 Crores) is in the age group of

18-40 years, which provides a huge opportunity for APY.

c. PFRDA officials met the bankers of Maharashtra State to secure their support on Atal

Pension Yojana (APY)

Shri A.G. Das, Chief General Manager ,Pension Fund Regulatory and Development

Authority(PFRDA)met the bankers of the State of Maharashtra at Pune to seek their enhanced

participation in outreach of the Govt sponsored Guaranteed pension scheme, APY. There are

nearly 8 lacs subscribers who have joined since June’15 and Maharashtra is the major

contributor under the scheme with more than 80,000 enrolments.

A specialized SLBC meeting was conducted on APY implementation & achievement of targets

by the Banks at Pune on 24th Sept 2015 and the meeting was organized by Bank of

Maharashtra . During the meeting Shri. L. M. Deshmukh, General Manager, Financial Inclusion,

Government Business & Convener, SLBC, Maharashtra urged the bankers to participate in

sourcing APY with higher numbers. PFRDA officials have made a presentation on APY

highlighting the latest changes in the product. The recent changes have made the pension

product more customer friendly with flexible mode of payments as per the option of the

subscribers of the scheme. Now the subscribers can opt for monthly, quarterly or half yearly

mode of payments and subscribers who have already registered with monthly payment option

may change into either quarterly or half yearly mode of payments. Mr A G Das has addressed to

the concerns and feedback of the banks in mobilizing APY and assured his support to the

bankers. He exhorted the bankers to utilize the services of BC and aggregators for sourcing

APY.

5. Highlights of development in pension sector – International- Global pension assets

According to “The Global Pension Asset Study (GPAS)”, a study by Towers Watson which

gathers yearly data on total assets, asset allocation, and plan structure for occupational pension

plans in Australia, Brazil, Canada, France, Germany, Hong Kong, Ireland, Japan, Malaysia,

Mexico Netherlands, South Africa, South Korea, Switzerland, UK and US, total assets of the

world's largest 300 pension funds grew by over 3% in 2014 (compared to around 6% in 2013) to

reach a new high of over US$15 trillion. Ten years ago, total assets at the world's largest

pension funds grew by 27% in that year to reach US$8.4 trillion and move above the previous

high of US$6.6 trillion reached in 2003. The research shows that by individual region North

America had the highest five-year combined compound growth rate of around 8% compared to

Europe (over 7%) and Asia-Pacific (around 4%). The research also shows that the world's top

300 pension funds now represent around 43% of global pension assets.

According to the research, defined benefit (DB) funds account for 67% of total assets, down

from 75% five years ago. During 2014, defined contribution (DC) assets grew the most, by

almost 5%, followed by defined benefit (DB) plans assets (almost 4%) and reserve funds (over

1%) while hybrid plan assets decreased by over 2%.

11

According to the research, the U.S. remains the country with the largest share of pension fund

assets accounting for around 38%, while Japan has the second-largest market share with around

12%. The Netherlands has the third-largest market share with 7%, while Norway and Canada are

fourth and fifth largest, respectively, with around 6% share each. The research shows that 25 new

funds entered the ranking during the past five years and, on a net basis, the countries that

contributed the most new funds were the U.K. and South Korea (two funds), Russia, Australia,

France, Peru, Vietnam and the U.S. (one fund). During the same period, Germany and Japan had a

net loss of three funds from the ranking. The U.S. has the largest number of funds in the research

(128), followed by the U.K. (27), Canada (19), Australia (16), Japan (15) and the Netherlands (13).

Top pension fund assets almost double in ten years

Assets under management (AUM) of the world’s largest pension funds totaled $15.4 trillion

in 2014.

Funds’ AUM increased by 3.4% in 2014, compared to 6.2% in 2013.

The top 20 funds had a growth rate of 3.9% in 2014, a slightly higher increase than the

overall ranking.

North America remained the largest region in terms of AUM, accounting for 43.2% of all

assets in the research.

Europe was the second-largest region (28.5%), followed by Asia-Pacific (24.1%).

North America experienced the most noticeable annualized growth during the period 2009-

2014 (7.6%), continuing the good performance since the 2008 recession. Europe and Asia-

Pacific showed growth rates of 7.1% and 3.9%, respectively.

The US accounted for 128 of the funds in the ranking. Since 2009, it has seen nine of its

funds drop out from the top 300, while 10 new funds joined the ranking.

Sovereign and public sector pension funds accounted for 66.9% of the total assets, with

141 funds in the top 300.

Defined benefit (DB) funds accounted for 66.8% of the total assets in the ranking. DB

assets grew by 3.7% in 2014, compared to 4.7% for defined contribution (DC) plans,

1.4% for reserve funds, and a decrease of 2.5% for hybrids.

On an arithmetic average basis, the top 20 funds invested approximately 39.5% of their

assets in fixed income securities, 42.2% in equities, and 18.3% in alternatives and

cash.

North American funds have predominantly invested in equities while there was a higher

interest for fixed income in Asia-Pacific funds.

12

6. Economic Outlook and Macroeconomic statistics

i. Economic Outlook

India’s GDP growth forecast

Quite a few international and national institutions have predicted that India’s gross domestic

product will grow between 7% and 7.5% for the year. According to a report by Ms. Nidhi Sinha

in Mint (October 07, 2015), since the beginning of last month, forecasts on India’s economic

growth by various agencies have been mostly negative; yet, the overall picture does not look

grim. Agencies predict India’s gross domestic product (GDP) will grow between 7% and 7.5%

for the year.

Earlier, on 30 June, data released by the Central Statistics Office showed India’s GDP growth

slowed to 7% in the April-June quarter from 7.5% in the January-March quarter as measured at

market prices.

With the International Monetary Fund (IMF) cutting the outlook for India on Tuesday, here’s a

look at who else is wavering about India’s growth and why.

IMF

The IMF has marginally lowered its 2015-16 growth forecast for India to 7.3% this year, lower

than the 7.5% it projected in July. But it expects growth to accelerate to 7.5% the following year.

It also added that India will remain the world’s fastest growing major economy. The Washington-

based multilateral institution attributed the lowering of India’s growth forecast to the weakening

of global external demand and the consequent impact on Indian exports.

Speaking in Washington on 30 September, IMF chief Christine Lagarde said “global growth will

likely be weaker this year than last, with only a modest acceleration expected in 2016”.

World Bank

The World Bank has maintained India’s growth forecast for the year when other multilateral

agencies and even the Reserve Bank of India think the global situation will drag down the

country’s growth, reports The Economic Times. In its twice-a-year South Asia Economic Focus

released on 4 October, the World Bank said India will grow 7.5% in the current fiscal, same as

its earlier June forecast, but warned delays in the adoption and implementation of key reforms

could affect investor sentiment.

Reserve Bank of India

While releasing its monetary policy on 30 September, the Reserve Bank of India (RBI) revised

downwards its real GDP forecast for 2015-16 to 7.4% from the earlier expectation of 7.6%,

saying that growth is expected to pick up in the latter part of the fiscal. The baseline outlook,

however, is subject to considerable uncertainties surrounding commodity prices, monsoon and

weather-related disturbances, volatility in seasonal items and spillovers from external

developments through exchange rate and asset price channels.

13

Ratings

A day after the RBI revised downwards its real GDP forecast for 2015-16 to 7.4%, Fitch Ratings

has lowered India’s GDP growth estimate for the current fiscal to 7.5% from 7.8% on average

monsoon, but said the country is poised to grow at 8% next fiscal on the back of reform push.

In its Global Economic Outlook report, Fitch said India took over as the fastest growing BRIC

this year with 7.5% GDP growth, driven by structural reforms and higher investment,, but added

that GDP growth in the first (April-June) quarter was “disappointing” as it slowed to 7% from

7.5% in the preceding quarter.

Asian Development Bank On 22 September, Asian Development Bank (ADB) pared India’s growth estimate for 2015-16

by 0.4 percentage points to 7.4% for 2015-16 from 7.8% predicted earlier, owing to economic

slowdown in industrial countries, a weak monsoon and stalled action on key structural reforms.

The report said a pick-up in the pace of investment and kickstarting the pending reforms will be

vital to boost growth momentum.

Organisation for Economic Co-operation and Development The Organisation for Economic Co-operation and Development (OECD) also trimmed its growth

estimate for India in 2015 to 7.2% from 7.3% predicted earlier, but just like IMF, maintained that

the country will still be the fastest growing major economy over the coming two years. The

organization noted on 16 September that the main exception to the worsening global economy

is India, “where growth is supported by strong consumer spending and public investment in

infrastructure”.

“The slowdown has been sharpest in countries heavily dependent on commodities and/or with

close trade links to China, notably in east and south-east Asia. The main exception to the

worsening picture is India, where growth is supported by strong consumer spending and public

investment in infrastructure,” it said in its report.

Moody’s On 8 September, Moody’s Investors Service said the Indian economy would grow at 7% in the

current fiscal on the back of slow recovery in industrial output and investment. It added that

country’s current account deficit may remain low, supported by declining oil prices. “We have

also reduced our projections for India to 7% in 2015 and 7.5% in 2016, from 7.5% and 7.6%

based on high frequency indicators suggesting that the recovery in industrial output and

investment is slow, and bank credit growth still subdued,” it said.

UBS Earlier in September, Swiss brokerage UBS revised downwards India’s GDP growth projection

for the current fiscal to 7.1% from 7.5% earlier, on account of weaker external demand

prospects, reported PTI. The global financial services firm has also lowered its growth projection

for financial year 2016-17 to 7.6% from 8.3% earlier. The downward revision in growth

projection comes despite lower oil prices which were expected to provide a boost to Indian

growth.

14

“Weaker external demand prospects and slow progress on balance sheet repair leads us to

curtail our growth forecast in spite of cuts in UBS’ Brent oil price projections to an average of

$57.5 in calendar 2016 (from $70),” UBS said in a research note.

ii. Macroeconomic Statistics

Indicators Units As on 31ST

August

2015

As on 30th

September

2015

Absolute

Change

Percentage

Change

1 2 3 4 5=Col 4-

Col 3

6= {Col 5/ Col

3 }*100

S&P BSE Sensex - 26283 26155 -128 -0.49

CNX Nifty - 7971 7949 -22 -0.28

Rs/$ 66.3062 65.7418 -0.56 -0.85

Gold $/Ounce 1132.5 1115.2 -17.3 -1.53

Crude Oil (NYMEX) $/Barrel 49.93 45.09 -4.84 -9.69

Whole Price Index

ON BASE 2004-05=100*

-

177.5 176.7

- 8.3 (y-o-

y) -4.95 (y-o-y)

Consumer Price Index

ON BASE 2012=100*

-

123.6 124.7 4.4 (y-o-y) 3.66 (y-o-y)

Index of Industrial

Production**

ON BASE 2004-05=100

-

173.0 180.3 7.3 (y-o-y) 4.2 (y-o-y)

10 year G-Sec Yield p.a.

Rs. 7.787

7.541 - 0.246

Foreign Exchnage

Reserve

USD in

bn 351.92 349.98 - 1.94 -0.52

Net FPI/FII(Equity) (Rs

crore)

Rs

Crore -16877 -6475 10402 61.63

Net FPI/FII (Debt) Rs

Crore -647 692 1339 206.95

Net FII (Total) Rs

Crore -17524 -5784 11740 66.99

FDI Equity Inflows^ Rs

Crore 24564 13115 -11449 -46.61

* Figures of July and August, 2015

** Figures of May and July, 2015

^ Figures of May and June 2015

15

7. Major news clippings on pension schemes of other countries

i. Hundreds of thousands withdraw cash from pension pots after rules relaxation: (UK)

- http://www.theguardian.com/money/2015/sep/17/hundreds-of-thousands-of-people-

empty-pensions-pots-since-relaxation-of-rules Lisa Bachelor@lisabachelor

Thursday 17 September 2015

More than 2,00,000 people have emptied their pension pot or withdrawn cash from it after the

relaxation of rules on accessing retirement savings this year. The first comprehensive

independent analysis shows that 204,581 people have taken advantage of the pension

freedoms bought in by George Osborne on 6 April that give those aged over 55 unfettered

access to their money for the first time. The figures from the Financial Conduct Authority, the

City watchdog, show that 137 savers cashed in entire pension pots worth £250,000 or more,

despite the fact that only 25% of such a lump sum withdrawal would tax-free. Of the remainder

who cashed in their entire savings, more than 47,000 withdrew pots worth up to £30,000.At the

same time, the sale of annuities – which provide a regular income from the pot of money that a

pension plan holder has accumulated during their working life – took a major hit. Just more than

12,000 annuities were sold between April and June compared with almost 90,000 in the same

period two years earlier. Tom McPhail, head of pensions research at financial adviser

Hargreaves Lansdown, said previous reports on the pension freedoms had understated the

significance of the changes. “We now know that investors are behaving radically differently

compared to just a few months ago,” he said. “Investor demand for non-annuity retirement

incomes, in the form of drawdown and one-off lump sums, now dwarf sales of annuity

arrangements. “It is perhaps too early to be sure that this is a permanent shift but it is starting to

look that way.” As well as revealing the numbers of people accessing their pension cash, the

FCA report highlighted the hefty charges some savers face when they try to get their hands on

their money. While the report showed that 85% were able to access their pension money

without paying an exit fee, more than 100,000 people faced charges of £1,000 or more. About

13,000 of these would pay more than £5,000.Steve Webb, the former pensions minister who

brought about the pension freedoms, said on Twitter: “147,000 over-55s face exit penalties over

5%; no way Govt will allow that to continue. “The figures will feed into an ongoing consultation

by the Treasury into charges. The consultation was announced by the chancellor in June in

response to mounting criticism over high charges and will close in mid-October. “The Treasury

will be taking a close look at these numbers to see whether there are grounds to intervene,” said

McPhail. “An exit penalty of over £1,000 is hard to justify. The FCA figures also appear to dispel

some suggestions that pension providers are simply refusing to offer savers access to their

cash. It said 80%-90% of people could access their pension money without needing to transfer

providers. However, the FCA figures do not cover workplace pension schemes and a separate

report from the pensions regulator suggests that fewer than half of workplace pension schemes

allow one-off or regular withdrawals from pension pots. In addition, fewer than a third of

workplace schemes give people access to their money via income drawdown.

16

ii. UK pension schemes face billion-pound bill: (UK) -

http://www.ft.com/intl/cms/s/0/1222596a-589b-11e5-a28b

50226830d644.html#axzz3p0qvSoAu by Madison Marriage September 13, 2015

The mayor of London’s newly appointed pension and investment adviser has warned that UK

pension funds are in denial. Imminent European rules could force schemes to put aside

“hundreds of billions” of pounds in additional capital. Edmund “Edi” Truell, who last month was

appointed as an adviser to Boris Johnson following two years in charge of the London Pensions

Fund Authority, believes Brussels will impose stricter than expected solvency requirements on

pension funds within five years.

iii. FCA to review new pension rules as complaints rise: (UK)

http://www.which.co.uk/news/2015/10/fca-to-review-new-pension-rules-as-complaints-rise-

417622/ 01 October 2015

The Financial Conduct Authority (FCA) has published proposed changes to the rules on pension

freedoms a day after new complaints figures. As new figures reveal that the number of

complaints made to pension companies increased by nearly a fifth in the first six months of the

year, the FCA has outlined proposed changes to its pension rules to tackle the risks and

challenges faced by consumers in the new retirement market. Life and pensions firms received

73,055 complaints about their products in the six months to June 2015 - an increase of 19.7%

compared to the previous six months.

The pension changes that came into force in April 2015 allow people greater flexibility to access

their money and greater choice in what they then do with it. However, the process hasn't always

been smooth, with people facing delays and the need to switch contract or provider to get their

preferred option.

Most complained about pension companies

Prudential was most the complained about firm in terms of life and pensions products with 8,827

complaints, followed by Friends Life (7,013), Royal London (5,688), Aviva (4,342) and Scottish

Widows (4,110). Executive director Richard Lloyd said: ‘It’s worrying to see such a big rise in

complaints about pension companies. If the freedoms are to be a success, it’s important that

firms play their part in helping people access, and make the most of, their hard-earned savings.

‘The regulator should work with the government to identify where firms are falling down and take

action to ensure people are treated fairly.’

Regulator to consult on pension freedoms

The consultation paper published by the FCA today proposes a series of measures to improve

the way that consumers are informed about how they can access their retirement money.

Among the proposals from the FCA are new requirements to help consumers shop around,

measures to ensure that consumers have the information to make informed decisions and a

discussion around the remuneration arrangements for the non-advised purchase of annuities.

Pension pots below £10,000 will not be subject to the FCA’s new ‘second line of defence’ rules.

When the rules were originally announced in February 2015, providers had to deliver the

17

warnings to every customer but now this will only apply to pots above £10,000 or if policies

include safeguarded benefits.

The consultation on changes to pensions regulation also proposes a commission cap, or even a

ban, on non-advised annuity sales. The FCA is also providing guidance for debt management

firms who may be pressurising people into using their pension pot to pay down debt.

iv. Canada Pension Plan to invest in eOne: (CANADA) -

http://www.iii.co.uk/stockmarketwire/266678/canada-pension-plan-invest-eone

By StockMarketWire | 16th September 2015

Canada Pension Plan Investment Board is to acquire 52.9 million common shares of

Entertainment One at a price of £2.69 per common share from Marwyn Value Investors LP.

CPPIB's total investment of £142.4m will represent an approximate 17.9% ownership interest in

the company. The transaction is conditional upon CPPIB having received notice from the

Australian Foreign Investment Review Board that there are no objections concerning its

proposed acquisition of shares in eOne. Notification, and the closing, is expected within 30

days.

Chief executive Darren Throop said: "We look forward to welcoming CPPIB as a significant

shareholder of eOne. CPPIB has a strong track record of focusing on the long term success of

the companies in which it invests and we are excited that it will play a part in the eOne story as

we execute our strategy to double to size of the business over the next five years."

v. Japan’s Public Pension Fund Moves to Invest in Private Equity: (JAPAN)

http://www.wsj.com/articles/japans-pension-fund-moves-to-invest-in-private-equity-

1442461689 By Eleanor Warnock Sept. 16, 2015

Government Pension Investment Fund GPIF will provide about $500 million to a World Bank

unit to invest in private equity in developing countries

TOKYO—Japan’s $1.2 trillion public pension fund, the largest fund in the world of its kind, has

taken its first step toward investing in private equity. The Government Pension Investment Fund

has struck a partnership with the International Finance Corp., part of the World Bank Group,

under which GPIF will provide some $500 million for IFC to invest in private equity in developing

countries, according to people familiar with the deal.

The move is a coup for IFC because competition is intensifying among global money managers

to help shepherd the GPIF’s diversification. The Japanese fund, which long had a portfolio

heavy on domestic government bonds, said last year it was putting more money in stocks and

foreign bonds. The GPIF is also venturing further afield into assets such as infrastructure,

private equity and real estate. These assets can comprise up to 5% of the GPIF’s ¥141 trillion

($1.2 trillion) portfolio. The GPIF is legally prohibited from direct private-equity investments, so it

must put in money through investment trusts.

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