Pension Fund Regulatory and Development Authority (PFRDA): Mandate, Structure & Reforms

Why in the News?

The Pension Fund Regulatory and Development Authority (PFRDA) has recently constituted a high-level Expert Committee (15-member committee)to develop a framework for assured payouts under the National Pension System (NPS).
The panel includes experts from legal, actuarial, finance, insurance, capital markets, and academic disciplines.
The initiative aligns with the provisions of the PFRDA Act, 2014 and aims to enhance the security of retirement income for subscribers.

Overview of Pension Fund Regulatory and Development Authority (PFRDA)

Statutory Status: PFRDA is a statutory regulatory body established under the PFRDA Act, 2014.

Objective: Its primary objectives are to promote old-age income security, establish, develop, and regulate pension funds, and protect the interests of subscribers to pension schemes.
Administrative Control: PFRDA functions under the Ministry of Finance.
Headquarters: New Delhi, with regional offices across India.

Composition of PFRDA

As per Section 4 of the PFRDA Act:
- Chairperson
- Three whole-time members
- Three part-time members
Appointments: Appointmentsare made by the Central Government from persons of ability, integrity, and standing, with expertise in economics, finance, or law. At least one member from each discipline is mandatory.

Functions of PFRDA

Regulation of Pension Schemes: Regulates the National Pension System (NPS) and other pension schemes like Atal Pension Yojana (APY) under its jurisdiction.
- Provides pension schemes not covered under any other enactment.
Subscriber Education and Awareness: Undertakes measures to educate subscribers and the general public on pension, retirement savings, and related issues.
- Trains intermediaries involved in pension administration.
Approval and Investment Guidelines: Approves pension schemes and sets investment norms and guidelines.
Regulation of Intermediaries: Registers and regulates NPS Trust, Points of Presence (PoPs), Central Record-Keeping Agency (CRA), Trustee Banks, Pension Funds, and Custodians.
- Ensures that operational and intermediation costs are economical and reasonable.
Subscriber Protection: Safeguards the interests of subscribers of NPS and other schemes approved by the Authority.
- Strengthens the grievance redressal mechanism with time-bound processes.
- Adjudicates disputes between intermediaries and between intermediaries and subscribers.

Q. Consider the following statements regarding the Pension Fund Regulatory and Development Authority (PFRDA):
1.	PFRDA is a statutory body established under the PFRDA Act, 2014.
2.	It functions under the Ministry of Labour and Employment.
3.	Its primary objective is to regulate the National Pension System (NPS) and protect the interests of subscribers.
4.	It consists of a Chairperson, five whole-time members, and three part-time members.

Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 4 only
(d) 1, 3, and 4 only

Answer: (b) 1 and 3 only

Explanation:
Statement 1 is Correct: PFRDA is a statutory regulatory body established under the PFRDA Act, 2014 to regulate pension schemes in India.
Statement 2 is Incorrect: PFRDA functions under the Ministry of Finance, not the Ministry of Labour and Employment.
Statement 3 is Correct: Its main objectives include regulating the National Pension System (NPS), promoting old-age income security, and protecting the interests of subscribers.
Statement 4 is Incorrect: PFRDA comprises a Chairperson, three whole-time members, and three part-time members, not five whole-time members.