About Pension Fund Regulatory and Development Authority (PFRDA)

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Overview:

Pension Fund Regulatory and Development Authority (PFRDA) Chairman recently said that a pension scheme with minimum assured returns is in the works by the PFRDA, which may entail higher premium payments for higher returns.

About Pension Fund Regulatory and Development Authority (PFRDA):

  • It is a statutory regulatory body set up under PFRDA Act enacted in 2014.
  • Objective: To promote old age income security by establishing, developing, and regulating pension funds and to protect the interests of subscribers to schemes of pension funds and related matters.
  • It  comes under the jurisdiction of the Ministry of Finance.
  • Headquarters: New Delhi
  • Composition: It consists of a Chairperson and not more than six members, of whom at least three shall be Whole-Time Members, to be appointed by the Central Government.
  • Functions:
    • Regulate National Pension System (NPS) and other pension schemes to which PFRDA Act applies;
    • Establish, develop and regulate pension funds;
    • Protect the interest of pension fund subscribers;
    • Register and regulate intermediaries;
    • Laying down norms for management of corpus of pension funds;
    • Establish grievance redressal mechanism for subscribers;
    • Settle disputes among intermediaries and also between intermediaries and subscribers;
    • Train intermediaries and educate subscribers and the general public with respect to pension, retirement savings, and related issues;
    • Call for information, conduct inquiries, investigations, and audit of intermediaries and other entities connected with pension funds;

Key Facts about National Pension System (NPS):

  • It is a government-sponsored pension scheme launched in January 2004 for government employees.
  • It was opened to all sections in 2009.
  • NPS is mandatorily applicable to Central Government employees (except Armed Forces) recruited on or after 01.01.2004.
  • Under NPS, a subscriber can contribute regularly to a pension account during her working life, withdraw a part of the corpus in a lumpsum and use the remaining corpus to buy an annuity to secure a regular income after retirement.

 


Q1) What is the National Pension System (NPS)?

NPS is a government-sponsored pension scheme launched in January 2004 for government employees. NPS is mandatorily applicable to Central Government employees (except Armed Forces) recruited on or after 01.01.2004.

Source: Pension scheme with minimum assured returns in the works: PFRDA