PFRDA chief wants fix on startup valuations before using pension money to fund them

The pension regulator said on Tuesday that the issue of valuations needed to be resolved before pension money could flow into startups.

“Besides the element of risk that is involved there are some other issues, valuation is a huge problem because today the way we do it all investments are valued at the end of the day.” , said Supratim Bandyopadhyay, Chairman of Pension Fund Regulatory. and Development Authority (PFRDA), adding that the pensions authority is however open to examining new areas of investment.

As to whether the government wants the Life Insurance Corporation (LIC) and the Employees’ Provident Fund Organization (EPFO) to invest in startups, he said in the pensions industry, pension funds report net asset value on a daily basis. “This is not true for EPFO ​​and LIC,” he said.

On Monday, the Ministry for the Promotion of Industry and Internal Trade (DPIIT) said it was in talks with EPFO ​​and LIC to allow pension and insurance funds to flow to startups. “We are trying for EPFO ​​and LIC to create a fund with the private sector. We are trying to encourage and involve them,” said Anil Agrawal, additional secretary of DPIIT.

Regarding the performance of the National Pension System (NPS), Bandyopadhyay said that the participation of the retail sector in NPS has reached a subscriber base of over 3 million, as of August 14, and that the corpus under- Jacent is about to hit a benchmark of ₹ 1 lakh crore. “Retail is an important benchmark for us because three years ago our corpus was roughly 13 to 13.5 lakh,” he said.

Bandyopadhyay noted that in three years the numbers have actually more than doubled and they are serious investors.