Role Of PFRDA In Retirement Plans: Powers & Functions

PFRDA stands for Pension Fund Regulatory and Development Authority. It is a government agency set up by the Pension Fund Regulatory and Development Authority Act, of 2013. It was set up to run the National Pension System (NPS) and regulate the pension industry in India. 

The Indian government has started a national project called Old Age Social and Income Security (OASIS) to look at how to make sure that everyone in the country gets a pension when they get old. The government has replaced the NPS pension plan with the contribution pension plan to protect all new state and central government employees who are not in the armed forces. 

PFRDA - Pension Fund Regulatory and Development Authority

In February 2003, the Union Parliament set up the Interim Pension Fund Regulatory and Development Authority (IRDA). It was started to build, promote, and control the way pensions are given out in the country. It was set up temporarily to keep the system running until the permanent and final system was put in place and ready with the agreement of all parties in India, even the opposition. 

The President set up the Pension Fund Regulatory and Development Authority (PFRDA) on September 19, 2013. It is a permanent act and system. The President was in charge of the PFRDA until 2014–15. Later, it turned into a regulatory body that worked on its own.

Functions of PFRDA: Role in Determining Retirement Plans

The following points explain the role of the Pension Fund Regulatory and Development Authority in brief:

• Regulating the National Pension System (NPS) and other pension schemes governed by the PFRDA Act; 
• Establishing, developing, and regulating pension funds; 
• Protecting the Interests of Pension Fund Subscribers; 
• Registering and Regulating Intermediaries.
• The schemes, terms and conditions, and the laying down of criteria for the management of the corpus of pension funds need to be approved by the PFRDA.
• Regulate the regulated assets and establish a grievance-redressing mechanism for subscribers
• Establish a grievance-redressing mechanism for subscribers. Conciliate disagreements between intermediaries as well as those that arise between middlemen and subscribers.
• Training for intermediaries and education of subscribers as well as the general public on matters about pensions, retirement savings, and other related topics.

PFRDA Pension Regulatory Powers

With the passing of the PFRDA Bill at the end of 2013, the PFRDA now has the legal power to oversee and keep an eye on the institutions of the NPS. A regulator like this can build trust in the system by making sure that the needs of NPS customers come first.

PFRDA can also start the next step of policy initiatives to make sure that more of the informal workforce as a whole is covered. With this change, the NPS will move the country closer to giving people in their later years social and financial security.

PFRDA official website: www.pfrda.org.in

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