<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p>India may allow foreign investment of up to 26 per cent in the pension sector, giving global players access to a roughly $2 billion pool of assets that is expected to grow quickly as more people join the organised workforce.<br><br>The recommendation by a parliamentary panel on a pending pension bill is the latest fillip to economic reforms that have stalled as the government was paralysed by a spate of scandals.<br><br>The government has been taking steps of late to make the country more investment friendly, backing in principle foreign direct investment in multi-brand retail, a reform that has been delayed for years.<br><br>Some of the reform measures, including a proposal to lift the cap on foreign holdings in insurance companies to 49 percent from 26 percent, require parliamentary approval.<br><br>Now, pension funds of over a million employees in India are managed by IDFC, State Bank of India, ICICI Prudential Life Insurance, Kotak Mahindra Bank, Reliance Capital and Life Insurance Corp of India.<br><br>Foreign firms have been lobbying for liberalising access to the pension and insurance sectors in a fast-growing country where most of the 1.2 billion population lack such investments.<br><br>Most of the 23 life insurance players in India, nearly all of which have a foreign partner holding a 26 per cent stake, are eager to enter the pension fund market, analysts said.<br><br>Global players holding stakes in Indian operators include Aviva, AIG, and AXA.<br><br>The pension and the insurance bills are currently being examined by a parliamentary panel, headed by Yashwant Sinha, former finance minister and a leader of the main opposition Bharatiya Janata Party.<br><br>The panel has also recommended that the returns from a new government pension scheme -- subscribed by employees of the central and state governments -- should fetch a minimum return at par with the state-run social security fund, the Employee Provident Fund (EPF).<br><br>The EPF, covered by separate law, manages more than $50 billion worth of assets for around 40 million employees and paid a 9.5 percent return in the fiscal year that ended in March 2011.<br><br>(Reuters)</p>