2. Pension Fund Regulatory and Development
Authority was established by the
Government of India on 23rd August 2003
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.
3. • The Pension Fund Regulatory and
Development Authority Bill, 2005 was
initially introduced in the Lok Sabha in
March, 2005 to provide for a statutory
PFRDA.
• The Bill lapsed on dissolution of the 14th
Lok Sabha.
• The PFRDA Bill, 2011 was introduced in
the Lok Sabha on the 24th March, 2011.
• The legislation sought to empower PFRDA
to regulate the New Pension System (NPS).
4. COMPOSITION OF AUTHORITY
The Authority shall consist of a Chairperson
and not more than five members, of whom
at least three shall be whole-time members,
to be appointed by the Central
Government.
5. Official amendments to the Pension Fund
Regulatory and Development Authority Bill,
2011
that the subscriber seeking minimum assured
returns shall be allowed to opt for investing his
funds in such schemes as may be notified by the
Authority;
withdrawals not exceeding 25 per cent of the
contribution made by subscriber will be
permitted from the individual pension account
as may be specified by PFRDA
6. the foreign investment ceiling in the pension
sector at 26 per cent or such percentage as may be
approved for the Insurance Sector, whichever is
higher may be incorporated in the present
legislation;
to establish a vibrant Pension Advisory Committee
with representation from all major stakeholders to
advise PFRDA on important matters of framing of
regulations under the PFRDA Act.
the membership of the PFRDA will be confined to
professionals having expertise in economics,
finance or law only.
7. The New Pension Scheme (NPS)
It has been made mandatory for all the Central
Government employees (except Armed Forces)
entering service with effect from 1.1.2004.
Government has launched the co-contributory
pension scheme titled "Swavalamban Scheme" in
the Budget of 2010-11.
As on 7th September, 2012 subscribers under NPS
was 37.45 lakh with a corpus of Rs. 20535.00 cr.
To ensure the integrity of NPS, creation of a
statutory PFRDA is considered necessary.
8. Background:
The following recommendations of the SCF
have not been accepted:
As regards the recommendation of SCF for
compulsory insurance of the funds of
subscribers by pension fund managers, a
provision has already been made in the
PFRDA Bill, to protect the interest of the
subscribers by ensuring safety of contribution
of subscribers and also by keeping the
operational costs in check
9. As regards the selection of pension fund
managers in such a manner that one third of
all such fund managers are from the public
sector, since a provision has already been
made in the PFRDA Bill that at least one of
the pensions fund shall be from the public
sector which sets a floor, the ceiling can be
any number based on objective criteria