The Pension Fund Regulatory and Development Authority (PFRDA) is a regulatory body in India that was established by the government in 2003 to promote, develop, and regulate the pension sector in the country.
The primary objective of PFRDA is to ensure the orderly growth and development of pension funds and protect the interests of subscribers to pension schemes.
Key functions of PFRDA:
Formulating Policies and Regulations: PFRDA is responsible for formulating policies and regulations governing pension funds, schemes, and related entities. It establishes the framework for the operation and management of pension funds in the country.
Registration and Regulation of Entities: PFRDA registers and regulates various entities involved in the pension sector, including pension funds, custodians, and other intermediaries. This helps ensure that these entities comply with the regulatory framework and standards.
Promoting Pension Schemes: PFRDA works towards the promotion of pension schemes to increase the penetration of pension coverage in India. It introduces and oversees pension schemes, such as the National Pension System (NPS), to provide individuals with a vehicle for long-term retirement savings.
Educational Initiatives: PFRDA conducts educational and awareness programs to inform the public about the importance of retirement planning and the benefits of participating in pension schemes. These initiatives aim to increase financial literacy and encourage individuals to plan for their retirement.
Monitoring and Supervision: PFRDA monitors the performance of pension funds and other entities within its regulatory purview. This involves supervising their activities to ensure compliance with regulations, protecting the interests of pension subscribers, and maintaining the overall integrity of the pension system.
Facilitating Innovation and Market Development: PFRDA works towards fostering innovation in pension products and services and promotes the development of the pension market. This includes exploring new avenues and investment options to enhance the efficiency and attractiveness of pension schemes.
Interacting with Stakeholders: PFRDA engages with various stakeholders, including pension funds, subscribers, employers, and other market participants. This communication is essential for gathering feedback, addressing concerns, and fostering a collaborative environment within the pension sector.
These functions collectively contribute to the overarching goal of ensuring the orderly growth and development of the pension sector in India while safeguarding the interests of pension subscribers.
The Pension Fund Regulatory and Development Authority (PFRDA) on Tuesday notified the National Pension System Trust (Second Amendment) Regulations 2023 and Pension Fund (Amendment) Regulations 2023 with amendments to NPS Trust Regulations.
The amendments to NPS Trust Regulations simplify the provisions related to the appointment of Trustees, their terms and conditions, the holding of meetings of the Board of Trustees, and the appointment of CEO – NPS Trust.
The other notable amendments, inter alia, include the clarity of roles of Sponsor of Pension Fund & Pension Fund along with compliance to ‘fit and proper person’ criteria; Constitution of additional Board committees by Pension Funds such as Audit Committee and Nomination & Remuneration Committee; Inclusion of name ‘Pension Fund’ in name clause and requirement of existing pension fund(s) to comply with this provisions within 12 months; and the annual report of schemes managed by the pension fund to include Directors’ responsibility statement.
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