Name: Vishnuvardhana, Sudarshan M.R
Country: India

Year: 2015
Volume: Volume-2, Issue-2 (July-December)
Page Number: 10-24

Social security schemes reforms have taken its crucial position in most of major policy issues for both developed and developing countries. The researchers and policy makers are critically evaluating and debating on appropriate mechanism to handle the complex issues related to aging population, lack of retirement funds, coverage of unorganized sector and asset liability management and so on. Pension reforms, have therefore become a crux for policy makers, investors and even market analysts. In most of the countries, pension funds are large investors especially in long-term capital contribution for infrastructure and other project developments. Research studies have highlighted on significant contributory force of pension funds on capital market development, which in turn contributes for overall economic development and new investment products. India’s pension business has immense potential to grow due to the fact that a large segment of its population has no access to a retirement fund. It has attracted wide attention across the global due to the reforms undertaken by Government of India in 2004 – by shifting from Defined Benefit (DB) to Defined Contribution (DC) scheme except for Defense services. Pension fund management is one of the crucial and complex processes which have a great effect on the financial market of any country. The effective and efficient investment mechanism of pension fund showcases the appropriate return on investment and it can be channelized for the beneficiaries. The present paper is an attempt of understanding the Pre and Post 2004 -Pension fund investment mechanism through detailed investigation of transition process of DB to DC method with empirical evidence on effect of pension fund investment on capital markets and channelization of fund for economic growth in the country. Further, the New NPS fund management and its issues have been discussed and possible measures are worked out on the same.
Key words: Pension fund investment, Capital market, NPS, Defined benefit, Defined contribution