DIFFERENT STROKES How the three funds differ.

SAFE: 50 per cent or more in government securities, 30 per cent in corporate FDs and 10 per cent in domestic equities. Nothing in international equities BALANCED: 30 per cent in government securities, 30 per cent in corporate FDs, 30 per cent in domestic equities, and 10 per cent in international equities GROWTH: 25 per cent in government securities, 25 per cent in corporate FDs, 40 to 50 per cent in domestic equities and 10 per cent in international equities

For insurance companies, banks and mutual fund players, it is really the next big thing. With the government weeks away from opening up the Rs 300,000-crore pension market and that too to just six players-five private and one public sector-intense jockeying to be one of the six has begun in the financial services industry. After all, it is for the first time that the huge pension corpus is being made available for private management. This accompanies the demise of the lifelong state-funded pension scheme, which will no longer be available to government employees, other than those in the armed forces, who join after October 1, 2003 (See The New Proposal).

New recruits, according to the scheme, will now have to contribute 10 per cent of their salary, and a matching contribution will be made by the government. Employees will also have the option to invest in any of three fund types: safe, balanced and growth-depending on their aptitude for risks (See Different Strokes). The employee will also have the option to switch from one fund to another, but without the right to withdraw funds before retiring or turning 60.

Given the size of the pension corpus (a study by Professor R. Vaidyanathan of the Indian Institute of Management Bangalore suggests that the taking could be as high as Rs 326,000 crore by 2005), not everyone in the industry is happy that the game has been limited to just six players. Says Sanjay Sachdev, CEO & MD, IDBI-Principal, Asset Management Company: "While we do not recommend limiting the number of fund managers to six, we do recommend stringent entry criteria, thereby ensuring that the participants are financially sound and capable of handling huge funds.''

Sachdev's wish-list of criteria says that companies should have a networth of Rs 100 crore, an active business presence and a consistent and acceptable investment track record. That's akin to what Deepak Satwalekar, Managing Director and CEO of HDFC Standard Life Insurance has to say. "Instead of limiting the number of players, the government should set stringent conditions for entry into this sector; otherwise it will limit the choice for the consumers-something similar to what has happened in the insurance sector,'' he notes.

Besides, the ''pro-more'' camp argues, the government is setting up an independent Pension Fund Regulatory and Development Authority (PFRDA) that will oversee the working of the funds and, therefore, instead of playing the door-keeper, the government should focus more on products that each player will bring to the table.

Just which companies will get their foot in the multi-crore business is the burning question among the industry's 13 insurance companies and 34 mutual fund companies. Insurance companies argue that for them "it will be a natural progression'', since both insurance and pensions are "two sides of the same coin" and involve making investment decisions for long-term funds. Secondly, because of its existing distribution network in terms of agents and brokers banks-the argument goes-insurance companies may be in a better position to keep their distribution costs low. Finally, since success in the pension sector involves mainly two things-accumulation and annuity pay out-the insurance sector believes that it makes the ideal candidate because of its long experience in a similar business.

The mutual fund industry, on the other hand, has its own set of arguments. Fund managers believe that there is a tremendous synergy between the existing business and the proposed pension and payout annuity business. ''We plan to capitalise on our existing infrastructure, intellectual capital, and the strengths of the local and global experience that our sponsors bring to our investment business,'' says Sachdev. Mutual fund players also contend that their existing teams of investment analysts and fund managers are more than adequate to service the potential needs and opportunities of the new business.

Yet, there remains a lot of confusion as far as the new scheme goes. For instance, will the new scheme, like the Old Age Social and Income Security (oasis) committee report, talk about a guaranteed rate of return (9 per cent from LIC for senior citizens) and penalise those fund managers who under perform? Will it allow only 26 per cent foreign equity or increase it to 49 per cent? Till the final draft is out, the players are keeping their fingers crossed.

-Ashish Gupta

EXECUTIVE TRACKING

Ashok Bhasin: One of three

Bhasin's Move

The buzz has it that Ashok Bhasin, Vice President, Marketing, Whirlpool India, isn't happy. Why should he be: last fortnight, his company hired Marico's erstwhile head of marketing Arvind Mendiretta as, what else, Vice President, Marketing. Bhasin, who, in his own words, considered himself ''part of the furniture'' at Whirlpool is reportedly juggling offers from a FMCG company, a TELCO, and Whirlpool's American parent. That's quite a menu.

Anil Sharma: Seeking Nirvana

Another Exit

Last fortnight, Anil Sharma, arguably India's finest Six Sigma trainer quit Reliance Infocomm where he was head of training and learning development. The former Modi Xerox and GE India staffer seemed set to join former Chrysalis partner Raj Kondur's Bangalore-based BPO start-up Nirvana. Sharma, who spearheaded GE's Six Sigma initiative in India, joins a growing number of high-profile execs- think Amit Bose, Shailendra Gupte, Geeta Chaudhury, Venkatesh Valluri, Radhika Balasubramaniam, and Rajesh Kurup - who have left Reliance Infocomm in the recent past. Well, all we can say is that much like GE, Reliance has a culture where you either fit in, or walk out through the front door.

-Moinak Mitra

DASH BOARD

C-
This reformist has feet of clay. Last fortnight, Union IT, Telecom, and Disinvestment Minister Arun Shourie let on that BSNL may shelve its international long distance plans because VSNL already has the infrastructure, he saw no point in duplicating it, and Tata Group Chairman Ratan Tata had written him a letter airing his concerns (the Group controls and manages VSNL).

A-
The grade comes with a minus tag because the deal hadn't been signed when this magazine went to press, but it looks like after many months of waiting and back-room stratagems, Kumar Mangalam Birla's Grasim, will end up with L&T's cement division.

BPO DESTINATION
Port Louis Calling

Devendra Chaudhry: Log on to Mauritius

Almost 500 years ago, the Portuguese discovered it. Now, the 2,040-sq km island-nation wants India to discover it-not as a tourist getaway, but as a bpo window to the Francophone world. "Mauritius is cheaper, removed from troubled hot spots and has loads of cultural affinity," points out Devendra Chaudhry, CEO, Business Parks Mauritius. Tracmail, a BPO joint venture between Mumbai-based Adi Cooper and the US-based Stream International, already calls the tourist resort its home, and the Gurgaon-based Daksh e-Services may be next. Says Sanjeev Agarwal, CEO of Daksh, which also looked at Philippines and Malaysia: "We are considering Mauritius seriously because it has a good labour pool, proximity to India and good telecom infrastructure." From a $64 million it turnover this year, Mauritius aims to reach the $400-million mark by 2008. "India's share will be substantial," says Chaudhry. Daksh & Co. willing, one may add.

-Moinak Mitra