PFRDA: Pension Fund Regulatory and Development Authority | Full Form, Meaning, Role & Services

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PFRDA – Pension Fund Regulatory and Development Authority

The Pension Fund Regulatory and Development Authority (PFRDA) is the key regulatory body in India overseeing pension funds. Established to promote, develop, and regulate pension systems, the institution ensures income security for retired individuals.

Governed by legislative powers similar to other financial regulators, PFRDA administers the National Pension System (NPS) and Atal Pension Yojana. It regulates pension funds, protects subscriber interests, and establishes norms for fund management. As the guardian of pension funds, it significantly contributes to establishing a sustainable pension framework for the citizens of India.

What is PFRDA and Its Full Form?

PFRDA full form stands for Pension Fund Regulatory and Development Authority. The Pension Fund Regulatory and Development Authority was established in 2003 in India. It plays a crucial role in overseeing and fostering the growth of the pension industry within the country. Initially catering to government employees, PFRDA's ambit expanded to include all Indian nationals, including NRIs and self-employed individuals.

The institution was originally introduced as the Interim Pension Fund Regulatory & Development Authority (IPRDA) in 2003, providing an interim solution until a comprehensive and universally accepted system could be devised. The final form, PFRDA, received presidential assent on September 19, 2013, and became a permanent act. Operating under the guidance of the President until the Financial Year 2014-15, PFRDA attained full autonomy and has functioned independently since then. The PFRDA's full form signifies an organisation dedicated to regulating and promoting the development of pension funds.

PFRDA Role and Responsibilities

The Pension Fund Regulatory and Development Authority (PFRDA) operates as the central autonomous body in India, functioning with executive, legislative, and judicial powers. Similar to other financial sector regulators like the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA), and Insolvency and Bankruptcy Board of India (IBBI), PFRDA holds a pivotal role in the regulatory sector.

PFRDA primarily focuses on regulating, promoting, and developing the pension sector in India. Its regulatory functions include overseeing and administering the National Pension System (NPS), a key component of the country's pension framework. As a quasi-government organisation, PFRDA ensures the implementation of policies and guidelines to safeguard the interests of pension contributors and facilitate the smooth functioning of pension-related mechanisms.

Objectives of PFRDA

The Pension Fund Regulatory and Development Authority (PFRDA) operates with a set of defined objectives to ensure the efficient and secure functioning of the pension sector in India. These objectives encompass:

Regulating NPS and Applicable Pension Schemes: PFRDA is tasked with regulating the National Pension System (NPS) and other pension schemes (Atal Pension Yojana – APY) falling under the purview of the PFRDA Act. This includes formulating policies and guidelines to govern these schemes.
Establishing and Regulating Pension Funds: PFRDA plays a pivotal role in the establishment, development, and regulation of pension funds, contributing to the overall stability and growth of the pension industry.
Protecting Subscriber Interests: Protecting pension fund subscribers' interests is one of the core objectives. It establishes mechanisms to safeguard contributors' rights and benefits.
Registration and Regulation of Intermediaries: It is responsible for registering and regulating intermediaries involved in the pension sector, maintaining oversight to uphold industry standards.
Approval of Schemes and Norms: Approving schemes, determining terms and conditions, and establishing norms for managing pension fund corpus is essential to maintaining transparency and reliability.
Establishing Grievance Redressal Mechanisms: PFRDA is committed to establishing effective grievance redressal mechanisms, providing subscribers with avenues to address concerns and disputes.
Promoting Professional Organisations: Promoting professional organisations connected with the pension system is part of PFRDA's objective, fostering a collaborative and expert environment.

PFRDA Guidelines for NPS

The National Pension Scheme (NPS), overseen by the PFRDA, operates on a defined contribution model. Subscribers' contributions are pooled into individual pension accounts, which are invested based on approved guidelines. The investment portfolio includes government bonds, bills, corporate debentures, and shares tailored to subscribers' preferences. Upon exit, subscribers can use accumulated funds to purchase a life annuity.

Pension Fund Regulatory and Development Authority (PFRDA) has established an NPS Trust, managed by a Board of Trustees, to ensure the effective management of assets and funds in the best interest of subscribers. The Board, comprising a Chairman and up to five members, meets regularly and holds responsibilities such as approving documents, reports, and audited financials submitted by intermediaries.

PFRDA Services

The Pension Fund Regulatory and Development Authority (PFRDA) is pivotal in advancing the cause of India's old age income security and pension schemes. Here are the key services offered by the institution:

Promotion of Pension Schemes: PFRDA actively promotes mandatory and voluntary pension schemes to address the income needs of retired individuals. This initiative aims to foster financial security during old age.
Management of National Pension System (NPS): PFRDA oversees the National Pension System, encompassing tier 1 and tier 2, regulating and guiding these schemes to ensure efficiency and compliance.
Appointment of Intermediate Agencies: PFRDA appoints critical intermediate agencies such as Pension Fund Managers and the Central Recordkeeping Agency (CRA). This ensures a well-organised and regulated pension framework.
Public Education and Stakeholder Awareness: The authority is committed to educating the public and stakeholders about the significance of pension planning. This outreach aims to create awareness and encourage active participation in pension schemes.
Training of Intermediaries: PFRDA provides training to intermediaries responsible for popularising and educating people about pension-related matters. This proactive approach enhances the effectiveness of pension awareness campaigns.

Contact Information

Individuals can contact the Pension Fund Regulatory and Development Authority (PFRDA) through the provided contact information for any inquiries, support, or to address grievances.

Website: www.pfrda.org.in

Phone Numbers

011-26517501
011-26517503
011-26517097

NPS Information Desk

Call Centre : 1800 110 708
SMS : NPS to 56677

Frequently Asked Questions

1. Which pension funds are registered with PFRDA?

PFRDA regulates various pension funds under the National Pension System (NPS). The list of registered pension funds can be found on the official PFRDA website.

2. Who is the regulator of the pension fund?

The Pension Fund Regulatory and Development Authority (PFRDA) regulates India's pension funds. It oversees the functioning of pension funds under the National Pension System (NPS).

3. Which regulatory authority is the NPS scheme under?

The National Pension System (NPS) scheme is under the regulatory authority of the Pension Fund Regulatory and Development Authority, as established by the Indian government.

4. Is PFRDA the regulator for NPS?

PFRDA is the designated regulatory authority for the National Pension System (NPS). It plays a crucial role in overseeing the management, regulations, and development of pension funds to ensure the financial well-being of subscribers.