New Delhi: Seven public sector financial institutions have submitted bids to the Pension Fund Regulatory and Development Authority (PFRDA) to manage pension funds under the new pension scheme (NPS). The institutions submitting bids are Life Insurance Corporation, State Bank of India, UTI Asset Management, Canara Bank, State Trading Corporation of India, Punjab National Bank and IDBI Capital.

The PFRDA had called for expression of interest from public sector companies to take up the role of pension fund managers (PFMs) on May 11 this year. The interim regulator said that they plan to appoint two to three PFMs to manage the new pension funds of all Central and State Government employees (barring the armed forces) recruited after January 1, 2004.

About five-lakh Central and State Government employees are estimated to have joined the scheme since it came into being on January 1, 2004, leading to an accumulation of around Rs1,700 crore pension fund corpus.

Under the NPS, employees have to contribute 10 per cent of their basic salary and dearness allowance, with a matching contribution from their employer. This contributory system is in contrast to the earlier system, in which employees used to get defined returns.

Only the left-ruled states - West Bengal, Tripura and Kerala - have not switched over to the system. The Northeast States though not having joined in are said to be willing once the PFMs are appointed and the framework is ready.