I D B I
C A P I T A L
Public Pension Fund
Management in India
Conference on Public Pension Fund Management
September 24-26, 2001
1
Outline












I D B I
C A P I T A L
Framework of Old Age Income Security in India
Mandatory Retirement Plans in India
Governance Structure for the Plans
Funding Levels and Coverage
Investment Guidelines
Historical Returns
How do the returns compare
Public v. Private Management
Benchmarking of Returns
Role of Funds in allocation of capital
Corporate Governance
Future Direction
2
I D B I
C A P I T A L
Framework of Old Age Income
Security in India
3
Public Pillar – Poverty
Alleviation Programmes


India does not have Social Security Programmes of OECD Countries
Government’s taxation power is used to fund Poverty Alleviation
Programmes
•
•
•

I D B I
C A P I T A L
26% of population below poverty line (1999-2000)
Employment Generation, Food for Work, Food Subsidy, Subsidised
Education and Health Care Programmes
Public Investments in a big way in industry and infrastructure during 1950-90
National Old Age Pension Scheme

Monthly Pension for the poor of above 65 years old
 5.3 million beneficiaries

Several welfare programmes covering agricultural workers, construction
workers and home workers
4
Mandatory Pillar – Covers
Formal Employment


I D B I
C A P I T A L
Government employees are covered under provident fund and pension
fund with a pay as you go system
Mandatory Provident and Pension Funds exist for the workers in
organised sector
Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 governs
mandatory plans
 All employees of notified industries and establishments with more than 20
employees mandatorily covered by three EPF Plans
 Compliance responsibility with the employer


Special enactments for certain groups with funded plans


Armed forces, Coal Mine Workers, Tea Plantation Workers, Jammu & Kashmir,
Merchant Navy, Banking Sector
High coverage of occupational plans among organised workers

Only 15.2% of total work force in Regular Salaried Employment
 Self-employed is 53.6%. Casual employment is 31.2%.
5
Voluntary Pillar – Main Stay of
Income Security

India has well-developed financial markets to provide savings
opportunities






I D B I
C A P I T A L
Established banking system with a vast reach – 65,000 branches with deposits of
over Rs 9,62,000 crore (US$ 205 billion – 44% of GDP)
Post Office Savings products cover the whole country – 133,000 post offices with
outstanding deposits of Rs 1,55,000 crore (US$ 33 billion – 7% of GDP)
Market Capitalisation of Stock Market – Rs 9,12,000 crore (US$ 194 billion –
42% of GDP)
Large market of Government Bonds – Outstanding of Rs 8,95,000 crore (US$
190 billion – 41% of GDP). Growing Corporate Bond market.
Fairly stable macro-economic environment
Informal Arrangements are important sources of security for the old

Cultural factors emphasise caring for the old
6
I D B I
C A P I T A L
Mandatory Retirement
Plans in India
7
Mandatory Plans in India

I D B I
C A P I T A L
All covered employees mandatorily become members of three EPF plans
Provident Fund Scheme (DC Plan) – Accumulation paid out on retirement. Early
withdrawals allowed for specified purposes.
 Pension Scheme (DB Plan) – Monthly Life Pension after retirement with
Survivor and Disability Benefits.
 Deposit Linked Insurance Plan – Additional payment based on accumulation
amount in case of death while in service



Combination Benefit Structure of DC and DB Plans
High Contribution Rates

12% Employee Contribution + 12% Employer Contribution = 24%
 In five specified industries, contribution is 10% + 10% = 20%
 Some companies have additional superannuation schemes with up to 15%
employer contribution
 Bonus and Special Allowances not included for computation of contribution
8
Employees’ Provident Fund
Scheme, 1952


I D B I
C A P I T A L
Defined Contribution Plan
Contributions

12% Employee Contribution + 3.67% Employer Contribution = 15.67%
 10% + 1.67% = 11.67% in five industries

Benefit Structure

Accumulated Balance paid out on retirement. Balance = Employee and Employer
Contributions + Interest credited – Non-refundable Loans
 No annuitisation
 Non-Refundable Loans allowed for for housing, major illness, marriage or
education of children and special circumstances


Portable between employers
Investment Risk is Borne by the Employee
9
Employees’ Pension Scheme,
1995


Defined Benefit Plan
Contributions







8.33% Employer Contribution + 1.16% Government Contribution (subject to limit)
Benefits


I D B I
C A P I T A L
Monthly Superannuation Pension for life at 50% of Average of last 12 months’ Salary
(for 33 years of service)
One-third pension can be commuted. Reduced pension with return of capital possible
Disablement Pension – Full Superannuation pension without minimum service
Survivor Pension – to surviving spouse and children (50% of pension for spouse and
25% for each dependent child)
No cost of living increases
Portable at EPF
Investment Risk borne by the Fund

Government has the power to increase contribution or reduce benefits
 Pension increased by 4% & 5.5 % after the last two biennial actuarial valuations
10
Deposit Linked Insurance Plan,
1971


Life Insurance Plan
Contributions


I D B I
C A P I T A L
0.5% Employer contribution
Benefits

Additional payment made to employee in case of death while in service
 Amount equal to accumulated balance in the Provident Fund
 Subject to a limit of Rs 60,000

Investment Risk borne by the Fund
11
I D B I
C A P I T A L
Governance Structure
12
Governance Structure

I D B I
C A P I T A L
The three mandatory plans are administered by Employees’ Provident
Fund Organisation

Set up under the EPF Act
 Central Provident Fund Commissioner appointed by the Federal Government is
CEO. Usually a civil service bureaucrat.
 Supported by Assistant and Regional Provident Fund Commissioners

Central Board of Trustees is the supervisory authority

Minister of Labour is the Chairman
 Central Provident Fund Commissioner
 Five Federal Government Representatives
 Fifteen State Government Representatives
 Ten Employer Representatives
 Ten Employee Representatives

All trustees are appointed by Federal Government after consultation
13
Administrative Structure

I D B I
C A P I T A L
EPFO carries out Benefit Administration and Record keeping

Set up an extensive administration network with offices all over the country
 Headquartered at New Delhi. 281 offices throughout the country.
 Employers pay contributions at designated banks

Fund Management is contracted out to a professional fund manager

State Bank of India is presently the fund manager
 No change in fund manager for several years
14
Exempted Funds

I D B I
C A P I T A L
Employers can opt out of the Government Schemes by setting up their
own Provident Fund and Pension Fund

Need to get an exemption from the Government under EPF Act
 Need to get an authorisation under Income Tax Act for tax exemption

Employers allowed to set up Exempted Funds when:
Contributions and Benefits under the Employer’s Scheme are not inferior to that
of the Government Scheme
 Agree to follow all guidelines including Investment Pattern


Employers can set up own trust

Full funding required
 Trustees are representatives of Employer and Employees
 Benefit Administration, Record-keeping and Funds Management done in-house

2970 Exempted Funds with 4.5 million subscribers (18.8% of total
subscribers)
15
I D B I
C A P I T A L
Funding Levels and Coverage
16
Funded Schemes

I D B I
C A P I T A L
Provident Funds

Both Employees Provident Fund and Exempted Funds are fully funded
 Assets of the Funds are represented by portfolios of securities

Pension Funds

Employees Pension Fund is funded by contributions of Employer and
Government
 Actuarial deficits, if any, of EPS not known
 Pension Funds managed by Employers in Banking Sector and Public Sector are
fully funded with regular actuarial valuations

All Funded Schemes are required to follow prescribed Investment
Pattern
17
Growth in Coverage of EPF
Year
Covered
Covered
Establish- Employees
ments
(Million)
1952-53
1,400
1.20
1959-60
7,373
2.70
1969-70
46,504
5.60
1979-80
93,094
10.46
1989-90
194,961
14.66
1999-2000
331,504
23.96

Total Covered Employees
EPF Act
Coal Mine Workers
Assam Tea Plantation
Workers
Seamen's PF
J & K PF
Banking Sector
177 industries and classes of
establishments covered today
Govt Employees
Total Coverage

Started with 6 industries in 1952
 All establishments with more than 20
employees covered within specified
industries

24 million subscribers covered
I D B I
C A P I T A L

(Million)
23.96
0.80
0.76
0.03
0.15
1.00
26.70
11.14
37.84
Approximately 9.7% of labour force
covered

53.6% is Self Employed
 31.2% is in Casual Employment
18
Total Pension Assets

Total Pension Assets
On 31-3-1999
(Rs Crore)
Provident Fund
EPF
Exempted Funds
Pension Fund
EPF
DLI Fund
EPF
Other Funds
Coal Mines
Assam Tea Plantation (est)
Banks (est)
Total Assets
I D B I
C A P I T A L

Asset Growth Rates
EPF

41,310
28,691
22,016
1998-99: 16%
 1997-98: 14%

Exempted Funds

1998-99: 7.5%
 1997-98: 8.1%
2,188
22,000
10,000
8,000
134,205
US$ 28.5 billion
7% of GDP
19
Reasons for low asset base


I D B I
C A P I T A L
Total GDP (2000-01) – Rs 1,972,700 crore (US$ 420 billion)
Gross Domestic Savings – 22.3% ( of which Total Household Savings –
19.8%)
Financial Savings – 10.5% (53%)
 Physical Savings – 9.2% (47%)


Provident and Pension Funds form 23% of total household financial
savings


Reasons for low asset base



2.1% of GDP every year goes into Provident and Pension Funds
No annuitisation in provident fund
High Premature Withdrawals: Rs 2715 crore in EPF and Rs 1437 crore in
Exempted Funds (in 1998)
• 60.8% of New Contributions
New Contributions in 1998

EPF – Rs 3643 crore. Exempted Funds – Rs 3175 crore. Total– Rs 6818 crore
20
I D B I
C A P I T A L
Investment Guidelines for
Provident and Pension Funds
21
Investment Guidelines
Prescription

I D B I
C A P I T A L
Funds are required to follow Investment Pattern prescribed by the
Government

Both Employees Provident Fund and the Exempted Funds follow the same
pattern
 Investment Pattern prescription comes from two sources:
• Ministry of Labour under EPF Act – Failure to comply could result in
withdrawal of Exempted Fund status and imprisonment up to 6 months
• Ministry of Finance under Income Tax Act – Failure to comply could result in
withdrawal of tax exemption for the Fund

Objectives not explicitly defined. Appear to be:
Ensuring complete safety of employees’ funds and confidence in the system.
 Channel funds to Government sector
 Pay a reasonable return to the employee

22
Asset Class Prescription

I D B I
C A P I T A L
Investment Guidelines define permitted Asset Classes

Almost entirely channeled to Government or Government Enterprises
 Percentage to be invested in each asset class specified

No investments allowed in
International Securities – Strict Capital Account Controls exist in India. No
Indian citizen or corporate can invest overseas.
 Stocks – India has a large stock market
 Real Estate – Only Financial Assets allowed
 Gold – Only Financial Assets allowed


No investments permitted in Bank or Corporate Deposits

Investment allowed only in marketable securities
 No loans to individuals or Corporates
 Only exception is Federal Government’s Special Deposits
23
Investment Pattern since
inception
I D B I
C A P I T A L
100%
90%
80%
70%
Federal Govt Bonds
Federal
Govt
Deposits
60%
50%
40%
State Govt Bonds
Bonds of Public
Enterprises
30%
20%
Any Public Category
10%
Private Sector Bonds
19
53
19
55
19
57
19
59
19
61
19
63
19
65
19
67
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
0%
Pvt Sector Bonds
State Govt Bonds
Any Public Category
Fed Govt SDS
Public Enterprises Bonds
Fed Govt Bonds
24
Investment Pattern in the past
10 years

100%
90%
Federal Govt Bonds 25%
70%
60%
50%
40%
30%
20%
10%
State Govt Bonds
15%
Bonds of
Public
Enterprises
40%
Any Public Category 10%
Pvt Sector Bonds 10%
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
0%
Federal Govt
Special
Deposits
Almost entirely channeled to
Government or Government
Enterprises

80%


I D B I
C A P I T A L
Divided among Federal Govt, State
Govts and Public Enterprises
Share of Government Enterprises
has gone up at the cost of direct
Government flows
Private Sector Bonds allowed up
to 10% since 1998

Not Mandatory; Can be invested at
the option of Trustees
 EPF Trustees decided against
investment in Private Sector
 Many Exempted Funds also do not
invest in Private Sector
25
One Investment Pattern fits all

I D B I
C A P I T A L
No distinction between Provident Fund and Pension Fund in the
Investment Pattern

Risk lies with Employee in a Provident Fund
 Risk lies with Employer in a Pension Fund
 Today, advocates of relaxation in Investment Pattern are focusing on Pension
Funds

No choice to the Employer or the Employee

Only choice is for the Employer to opt out by setting up an Exempted Fund
 No choice of alternate investment patterns based on risk preferences of
Employees and Empoyers
26
I D B I
C A P I T A L
Returns on Provident and
Pension Funds
27
EPF Interest Rate in the past 12
years

16%
15%

14%
13%
12%
12%
11%
11%
9.5%
10%
9%
8%
7%
6%
1991 1992 1993
1994 1995 1996
1997 1998 1999
2000 2001 2002

I D B I
C A P I T A L
EPF Interest Rate remained fixed at
12% from 1991-92 to 1999-2000
Slashed to 11% in 2000-01
consequent to fall in market interest
rates
Being further reduced to 9.5% in
2001-02 due to sharp fall in interest
rates
10 year Govt Bond Yield
1997
12.9%
1998
11.9%
1999
11.9%
2000
10.4%
2001
9.2%
28
Deposit Account Concept

I D B I
C A P I T A L
Provident Fund works like a Deposit Account

Unlike a Mutual Fund, NAV of underlying portfolio not computed
 Members’ Accounts are credited annually with an interest rate declared based on
current income of the Fund
 Members get annual Statements of Account



No loss of principal amount. Interest credited every year.
Fairly Stable Interest Rate. Changed in the event of substantial changes
in market interest rates
No Disclosure of Portfolio or Actual Returns
29
No Active Management

I D B I
C A P I T A L
Funds are required to hold all investments until maturity

Sale before maturity requires approval of Provident Fund Commissioner
 No Valuation of investments. No marking to market.
 Accounted like long term investments.

No permission to Fund Managers to churn portfolio

Cannot generate profits based on market views
 Cannot sell a security when issuer’s financials deteriorate
 But funds are protected from market risk

Specified Pattern applies to fresh accretion only

New contributions and redemption proceeds are required to be invested according
to the pattern
 Interest in any asset category is required to be reinvested in the same category

Changes in interest rates affect Provident Funds with a lag effect
30
Special Deposit Rate
determines EPF Rate

I D B I
C A P I T A L
Special Deposit Scheme started by the Government as a
convenience to Provident Funds

Available round the year - A big help when Government Bond issuances are infrequent and
secondary market liquidity is poor
 Withdrawals permitted without any loss of interest

Interest Rate on Special Deposits determined by Federal
Government

Broadly tracks government bond yields
 Government equalises the EPF rate with
• Government Provident Fund Rate
• Public Provident Fund Rate
• Small Savings Schemes distributed through Post Offices
• Special Deposit Scheme Rate
 These are few of the administered interest rates in the country

Special Deposits were to mature in 1998

Federal Government unilaterally extended the maturity to 2003
31
Portfolio Composition of Funds

I D B I
C A P I T A L
Portfolio Composition of Funds depends on their age

Older funds are weighted towards Federal Government Special Deposits and
Government Bonds
 Newer funds are weighted towards Bonds of Public Financial Institutions and
Public Enterprises
Typical New Fund (set up in 1998)
Typical Old Fund (set up in 1948)
Federal Govt
Bonds
State Govt Bonds
Bonds of PSEs
Special Deposits
32
Confidence in the System

I D B I
C A P I T A L
Public Confidence maintained in PF System

Unquestioned confidence in the system from employees
 PF considered the safest investment
 Government thought to be behind the system

PF interest rate works like an administered rate despite full funding and
separate portfolio
33
Real Rates of Return
16%
14%
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
I D B I
C A P I T A L
Consumer Price Inflation
is sharply down in the last
3 years
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
Despite fall in nominal rates,
Real rate of interest has risen
PF Rate
Real Rate
CPI
34
I D B I
C A P I T A L
How do the Returns compare
35
Where do public savings flow?
Distribution of Financial Savings
Of Households in 1999-2000


Total Financial Savings of
Households (1999-2000): Rs 2,05,898
crore (US$ 43.8 bn)
Top 5 Investments






Currency
Stocks
Govt Schemes
Provident and Pension Funds
Bank Deposits
Mutual Funds
Insurance
Others
I D B I
C A P I T A L
Bank Deposits (33.6%)
Provident and Pension Funds (23.1%)
Post Office Savings (12.2%)
Insurance (12.1%)
Currency (8.9%)
Stocks, Bonds and Mutual Funds
form a small part
36
PF Returns compared to Bank
Deposits

14%
12%
10%
I D B I
C A P I T A L
Most of the time, Bank Deposit
rates are lower than PF Interest
Rate

Banks have higher administrative
costs
 Banks have to follow Cash Reserve,
Liquidity Ratio stipulations
8%
6%
4%
2%
0%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
PF Rate
2%
1%
Bank Deposits
Bank Deposits over PF Rate
1%
0%
-1%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
-1%
-2%
-2%
-3%
37
Returns on Underlying Assets –
Government Bonds
16%

15%
14%
13%
12%
I D B I
C A P I T A L
Since 1993, yields on Federal
Government Bonds are marketdriven

Bonds issued in auctions
 Banks, PFs, LIC required to invest in
Govt Bonds up to specified percentage
 Banks hold Govt Bonds much in excess
of requirement
11%
10%
EPF Rate
9%
8%
7%
6%
1991
1992
1993
1994
1995
PF Rate
1996
1997
State Govt
1998
1999
2000
2001
2002

Central Govt
Central Govt Bonds over PF Rate
2.00%
1.50%

State Govt Bonds yield 15-20 bp over
Federal Govt
Govt Bond yields have fallen sharply
in the past four years
1.00%
0.50%
0.00%
-0.50%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
-1.00%
38
PF Rate compared to Mutual
Funds
How are mutual funds doing?
Annual Return
Category
%
Equity-Diversified
-33.82
Equity-ELSS
-32.72
Equity-Index
-27.17
Sectoral-Basic
-6.01
Sectoral-FMCG
-22.7
Sectoral-MNC
-23.9
Sectoral-Pharma
-12.59
Sectoral-TMT
-58.27
Gilt
Mutual Funds is a nascent industry in India



Experience for only 2-3 years
Equity Funds have made big losses due to
market conditions
Gilt Funds are the only exception with 18%
return during last one year
18
Income
5.59
Liquid
9.01
MIP
-6.66
Balanced

I D B I
C A P I T A L
-16.89
39
Returns on Stocks
Returns on BSE Sensex
In the last five years
I D B I
C A P I T A L


14.7% over 9 years from 1992-93 to
1999-2000
 22.3% over 10 years from 1980-81 to
1989-90
50.00%
40.00%

30.00%
20.00%
10.00%

0.00%
1997
1998
1999
2000
2001
Average Returns over long periods
Regular crises on Indian stock
markets have affected confidence
of retail investor
Substantial volatility has resulted in
individual investor turning away
-10.00%
-20.00%
-30.00%
-40.00%
40
Tax Benefits

I D B I
C A P I T A L
Tax benefits for contributions

Employees get tax rebate on their contribution to Provident Fund
 Employer’s contribution is tax free


Interest is tax free
Taking tax benefits into account, returns are unmatched
41
Can PF Returns be increased?

I D B I
C A P I T A L
Without disturbing Deposit Account Concept

Private Sector Bonds can give a higher return
• Will increase risk. PF managers need to have skills to evaluate risk.
 Government Securities give higher return compared to Special Deposits

By Shifting to NAV Concept

Investment in Stocks will sharply increase risk and give higher return potential
 International Diversification can increase yield
 Active management of portfolio
42
I D B I
C A P I T A L
Public v. Private Management
43
Exempted Funds

Employers can contract out of EPF and set up privately managed funds



Only 3,000 companies have opted to set up Exempted Funds
Most Exempted Funds manage funds in-house. Few engage a
professional fund manager
Exempted Funds have obligation to declare at least the EPF Rate


I D B I
C A P I T A L
Employer to bear the cost in case of shortfall
Little evidence of Private Management producing better returns

Some Exempted Funds declare more than EPF Rate
 This is related to age of the fund
 Higher return by taking higher risk
 Small privately managed funds are at disadvantage compared to EPF

Professional management can increase returns marginally

Guidelines drive the returns
44
No Minimum Rating Stipulation

I D B I
C A P I T A L
Guidelines do not stipulate minimum rating for investment

Only for Private Sector Bonds are required to be rated at investment grade (BBB
and above) by two rating agencies
 Implicit assumption that public enterprises are safe

Many trustees have internal guidelines stipulating minimum rating

EPF and CMPF Trustees have minimum rating criteria
 Some Exempted Funds also have such criteria

Most Exempted Funds do not have capability to evaluate investments

Very few Exempted Funds engage a professional fund manager
 Often consider all eligible securities as equal
 Assume that market interest rates represent risk-adjusted return
 Implicit assumption that public enterprises are safe is coming increasingly under
challenge
45
I D B I
C A P I T A L
Benchmarking of Returns
46
Benchmarking

I D B I
C A P I T A L
Exempted Funds are benchmarked against EPF Rate for interest
declared

Performance can be evaluated by outperformance over EPF
 No risk parameters available
 Age of the fund becomes critical

Actual Returns are not disclosed

NAV not computed
 Hence no benchmarking is possible

No satisfactory benchmarks even for debt funds

Couple of Govt Bonds benchmarks available in the market
 Not followed by the market

Equity Indices are well-established

Not relevant since PFs do not invest in equities
47
I D B I
C A P I T A L
Role of Funds in Allocation of Capital
48
Government Bonds and Special
Deposits support fiscal deficit

120000
Central and State Governments run
large deficits
 Government has been running
revenue deficit with high
consumption expenditure financed by
borrowing
 In old funds, almost 90% of funds are
with government
8.00%
100000
7.00%
Rs Cr
6.00%
5.00%
60000
4.00%
40000
3.00%
2.00%
20000
1.00%
0
0.00%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Revenue Defict
Fiscal Deficit
% of Fiscal Deficit to GDP
Government Bonds are used for
deficit financing

9.00%
80000
I D B I
C A P I T A L


Pay as you go system in substance
Does Investment Pattern encourage
government deficit?

Banks and LIC are biggest
subscribers of Government Bonds
 Banks invest more than SLR
requirements in Government Bonds
49
Private Sector funded through
Public Financial Institutions
Total Privately Placed Bond
issuances in 2000-01
(Rs 52,433 crore – US$ 11.2 bn)

Private
Sector
17%
State PSEs
22%
Financial Institutions are biggest
issuers of bonds


Make loans to private enterprises for
setting up new projects
PSE Bonds has created productive
infrastructure in the country

FIs and
Banks
46%
I D B I
C A P I T A L
State Govt enterprises have set up
projects in irrigation, road
development, power projects
Central PSEs
15%
50
I D B I
C A P I T A L
Corporate Governance
51
Corporate Governance

Provident and Pension Funds play no role in corporate governance



I D B I
C A P I T A L
No investment in equities
Even mutual funds are yet to play an active role
Recently, stock exchanges have issued guidelines for disclosure
towards corporate governance
52
I D B I
C A P I T A L
The Future
53
Future Pension Reforms


OASIS Project initiated by Ministry of Social Justice to identify pension
reforms required
Key recommendations






I D B I
C A P I T A L
Establishment of a Pensions Authority
Introduction of Individual Retirement Accounts
To be managed by approved Pension Managers (committee recommended six)
A common servicing and record-keeping infrastructure
Three funds from each company representing conservative, balanced and
aggressive investment styles
Group of Ministers constituted by Government to examine suggested
reforms
54
Possible Future Direction

I D B I
C A P I T A L
Introduction of Retirement Funds

NAV based funds
 Different investment objectives and management styles
 Capital preservation funds

Option to Employees to shift fully or partially to Retirement Funds
managed by approved pension companies




Employees may take time to get used to variable returns
Marketing and administration costs will increase
Strict Regulation and Disclosures required
Requires distribution and servicing infrastructure to be set up

Common infrastructure as suggested by OASIS may be a good option
55
I D B I
C A P I T A L
Thank you for your
attention
56