The Union Cabinet on Wednesday, 17 November 2011 cleared the long awaited Pension Bill while agreeing to the proposed 26% Foreign Direct Investment (FDI) in the pension sector. The government has however retained the flexibility of changing the FDI cap.

The Standing Committee on Finance headed by Yashwant Sinha has reportedly recommended capping FDI in pension funds at 26%. The Standing Committee had also recommended that subscribers to the New Pension System (NPS) should get an assured return on their investments that is at least equal to the interest rate given by the Employees' Provident Fund Scheme, according to reports.

The government is likely to finalize the changes in the Pension Bill with a view to incorporating suggestions made by the parliamentary panel. According to sources, the Pension Fund Regulatory and Development Authority (PFRDA) Bill, 2011 will be placed in the winter session of the parliament, beginning next week, for approval.