The Pension Fund Regulatory and Development Authority (PFRDA) is a regulatory body that supervises and regulated the dstoribution of pensions in India.
It is under the control of the Ministry of Finance in the Government of India, having been established in 2003 based on the OASIS (an acronym for old age social & income security) report by the Government of India. Additionally, it was part of the National Pension Scheme.
This article will give further details about the PFRDA within the context of the IAS Exam.
Brief History of Pension Fund Regulatory and Development Authority
A national project called “OASIS” was commissioned by the government of India to have a look at policies regarding old age income security in the country. With the recommendations of the the report, the Government of India established a new Defined Contribution Pension System replacing the previous Defined Benefit Pension System. The new pension system allowed for new entrants to Central /State Government service pension scheme, except for the Armed Forces.
The Interim Pension Fund Regulatory & Development Authority (PFRDA) was first established in August 23, 2003 promote, regulate and develop the pension sector in India. The NPS was subsequently extended to all citizens of the country with effect from 1 May 2009 including self employed professionals and others in the unorganized sector on a voluntary basis.
It was on 19 September 2013 when President Pranab Mukherjee gave his assent to the Pension Fund Regulatory and Development Authority Bill of 2013 on 4 September 2013 in the Lok Sabha.
It became a Permanent Act on 6 September 2013 when it was tabled during the Monsoon session of the Rajya Sabha. It was an improved version of the old IPRDA Bill of 2003.
The President of India is the guardian of the PFRDA, subject to his Financial Emergency Powers, as per the Articles of the Constitution of India. The PFRDA became an autonomous body in the Financial Year 2014-2015.
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Facts about Pensions:
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Functions of the PFRDA
The preamble of PFRDA states that the aims of the authority is – “to promote old age income security by establishing, developing and regulating pension funds, to protect the interests of subscribers to schemes of pension funds and for matters connected therewith or incidental thereto.”
PFRDA is head-quartered at New Delhi with various regional offices spread across the country.
- Promote pension scheme in the country by fostering mandatory as well as voluntary pension schemes in order to serve the old age income needs of retired personnel
- National Pension System, both tier 1 and tier 2 are under the purview of PFRDA and are dictated by the same
- PFRDA performs the function of appointing various intermediate agencies like Pension Fund Managers, Central Record Keeping Agency (CRA) etc.
- Educating the general public and stakeholders about the importance of pension.
- Training of intermediaries that perform the task of popularizing and educating people about the importance of pension.
- Addressing grievances related to various pension schemes in the country.
- Addressing and resolving disputes between various intermediaries like banks and between customers and intermediaries.
Frequently Asked Questions on Pension Fund Regulatory and Development Authority
What is the aim of the PFRDA?
What is the objective of pension regulator?
What are pension fund’s roles and purposes?
Receiving of Subscribers funds from Trustee Bank for investments as per subscriber preferences. Investing the funds in securities prescribed in the investment guidelines issued by Authority and Investment Policy approved by the Board of Pension Fund.
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