New Delhi, July 20: The State Bank of India, UTI Asset Management Company and the Life Insurance Corporation have been appointed to manage the Rs 2,000-crore pension fund.

Under the new pension system, up to 5 per cent of the money collected from various central and state government employees will be invested in stocks by the pension managers.

Besides these entities, IDBI Capital was shortlisted by the interim pension regulator to act as a fund manager and asked to submit bids. “Based on the overall evaluation, including technical and commercial parameters, a PFRDA-constituted committee has found the SBI, UTI Asset Management Company and the LIC to be the three best value bidders and has recommended their appointment as sponsors of pension funds under the new pension system,” an official statement said.

The report is being considered by the Pension Fund Regulatory and Development Authority (PFRDA).

“The three entities will have to set up separate companies and the process of managing pension funds could start in the next four to six months,” said PFRDA officials.

Under the new system, applicable to all central government staff except armed forces recruited since 2004, employees have to contribute 10 per cent of their basic salary and dearness allowance along with a matching contribution from their employers. The fund managers will offer various products to employees, including risk-free options under which all funds will be invested in government securities and market-linked products with variable returns, officials said.

Punjab National Bank, Canara Bank and the Securities Trading Corporation of India had also submitted expressions of interest. But their applications were rejected by the PFRDA.

Only financial companies and banks in which the government has at least a 51 per cent stake and which manage assets worth Rs 10,000 crore are eligible for the pension fund management job, the regulator said. This is an interim mechanism till the pension reforms bill is passed by Parliament.

After the pension fund managers are appointed, the PFRDA will allow them access to the pension funds of around 5 lakh employees of both central and some state governments.

The regulator has already appointed National Securities Depository Limited (NSDL) as the central record-keeping agency.

All states, except Bengal, Tripura, Kerala and some in the Northeast, have switched over to the new pension system.