Introduction 

Pension Fund Regulatory and Development Authority (PFRDA) is a statutory body established by an enactment of Parliament, for the purpose of regulating, promoting and ensuring orderly growth of the National Pension System (NPS) 

• It works under the Department of Financial Services under the Ministry of Finance. 

How PFRDA came into existence? 

• The Government of India had, in the year 1999, commissioned a national project titled “OASIS” (an acronym for old age social & income security).  
• Based on the recommendations of the OASIS report, Government of India introduced a new Defined Contribution Pension System for the new entrants to Central/State Government service, except to Armed Forces, replacing the existing system of Defined Benefit Pension System. 
• On 23rd August, 2003, Interim Pension Fund Regulatory & Development Authority (PFRDA) was established through a resolution by the Government of India to promote, develop and regulate pension sector in India.    
• The contributory pension system was notified by the Government of India on 22nd December 2003, now named the National Pension System (NPS) with effect from the 1st January 2004. 
• The Pension Fund Regulatory & Development Authority Act, 2013 was passed on 19th September, 2013 and the same was notified on 1st February 2014.  
• PFRDA is regulating NPS, subscribed by employees of Govt. of India, State Governments and by employees of private institutions/organizations & unorganized sectors. 

What is the Structure of PFRDA? 

• Head Office: 
  • The head office of the Authority shall be in the National Capital Region (NCR). 
  • The Authority may establish offices at other places in India. 
• Composition: 
  • The Authority shall consist of the following Members, namely: —  
    • (a) Chairperson 
    • (b) Three whole-time members 
    • (c) Three part-time members 
  • To be appointed by the Central Government from amongst persons of ability, integrity and standing and having knowledge and experience in economics or finance or law with at least one person from each discipline. 
• Pension Regulatory and Development Fund: 
  • The PFRDA Act, 2013 provides for the establishment of the fund to be called the Pension Regulatory and Development Fund and there shall be credited thereto: 
    • All Government grants, fees and charges received by the Authority. 
    • All sums received by the Authority from such other source as may be decided upon by the Central Government.  
  • The Fund shall be applied for meeting—  
    • The salaries, allowances and other remuneration of the Chairperson and other members and officers and other employees of the Authority. 
    • Other expenses of the Authority in connection with the discharge of its functions and for the purposes of this Act.  
• Pension Advisory Committee: 
  • The Pension Advisory Committee shall consist of not more than twenty-five members, excluding ex officio members, to represent the interests of employees’ associations, subscribers, commerce and industry, intermediaries, and organizations engaged in pension research.  
  • The Chairperson and the members of the Authority shall be the ex officio Chairperson and ex officio members of the Pension Advisory Committee.  
  • The objective of the Pension Advisory Committee shall be to advise the Authority on matters relating to the making of the regulations.  
• Intermediaries under PFRDA: 
  • PFRDA has chosen a group of intermediaries to help with the organization, collection, management, record keeping, and distribution of money.   
  • Intermediaries include pension fund, central recordkeeping agency, National Pension System Trust, pension fund adviser, retirement adviser, point of presence and such other person or entity connected with collection, management, recordkeeping and distribution of accumulations. 

What are the Functions of PFRDA? 

• Undertaking steps for educating subscribers and the general public on issues relating to pension, retirement savings and related issues and training of intermediaries. 
• Providing pension schemes not regulated by any other enactment. 
• Protecting the interests of subscribers of NPS and such other schemes as approved by the authority from time to time. 
• Approving the schemes and laying down norms of investment guidelines under such schemes.  
• Registering and regulating intermediaries- NPS Trust, Points of Presence, Central Record keeping Agency, Trustee Bank, Pension Funds, Custodian for time bound service to subscribers. 
• Ensuring that the intermediation and other operational costs are economical and reasonable. 
• Making existing grievance redressal process robust & time bound. 
• Adjudication of disputes between intermediaries and between intermediaries and subscribers. 
• PFRDA have set up a Trust under the Indian Trusts Act, 1882 to oversee the functions of the Pension Fund Managers (PFMs). 

What are the Schemes Regulated by PFRDA? 

• Two schemes, National Pension System (NPS) and Atal Pension Yojana (APY) are regulated by the PFRDA. 

National Pension System: 

• About: 
  • The Central Government has introduced the National Pension System (NPS) with effect from January 2004 (except for armed forces). 
  • In 2018 to streamline the NPS and make it more attractive, the Union Cabinet approved changes in the scheme to benefit central government employees covered under NPS. 
  • NPS is being implemented and regulated by PFRDA in the country. 
  • National Pension System Trust (NPST) established by PFRDA is the registered owner of all assets under NPS.  
• Structure:  
  • NPS is structured into two tiers: 
  • Tier-I account - This is the non-withdrawable permanent retirement account into which the accumulations are deposited and invested as per the option of the subscriber. 
  • Tier-II account - This is a voluntary withdrawable account which is allowed only when there is an active Tier I account in the name of the subscriber. The withdrawals are permitted from this account as per the needs of the subscriber as and when claimed. 
• Beneficiaries: 
  • NPS was made available to all Citizens of India from May 2009. 
  • Any individual citizen of India (both resident and Non-resident) in the age group of 18-65 years can join NPS. 
  • However, OCI (Overseas Citizens of India) and PIO (Person of Indian Origin) card holders and Hindu Undivided Family (HUFs) are not eligible for opening of NPS accounts. 

Atal Pension Yojana: 

• About: 
  • The scheme was launched in May 2015, with the objective of creating a universal social security system for all Indians, especially the poor, the under-privileged and the workers in the unorganized sector. 
  • The scheme has been implemented comprehensively across the country covering all states and Union Territories with male to female subscription ratio of 57:43. 
  • However, only 5% of the eligible population has been covered under APY till date. 
• Administered By: 
  • PFRDA through NPS. 
• Eligibility: 
  • Any citizen of India can join the APY scheme. The age of the subscriber should be between 18-40 years. 
  • The contribution levels would vary and would be low if a subscriber joins early and increases if she joins late. 
• Benefits: 
  • It provides a minimum guaranteed pension ranging from Rs 1000 to Rs 5000 on attaining 60 years of age. 
  • The amount of pension is guaranteed for lifetime to the spouse on death of the subscriber. 
  • In the event of death of both the subscriber and the spouse, the entire pension corpus is paid to the nominee.