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In a major overhaul of its pension fund regulations, pension regulator PFRDA has brought pension funds within the ambit of Prevention of Money Laundering Act (PMLA), tightening the oversight on these entities.
It has as part of the latest amendments to its existing pension fund regulations introduced a concept of ‘fit and proper’ criteria for Principal Officers of both the sponsor and the pension fund.
With the ‘fit and proper’ norms, PFRDA has aligned itself with similar norms already prevalent under SEBI for ‘fit and proper’. It has also now introduced specific regulations on how net asset value should be computed for pension fund schemes. Also, it has mandated the setting up of nomination and remuneration committee as part of the board of pension fund.
Also, every pension fund in the market should have ‘pension fund’ as part of its name (for instance one cannot have UTI Retirement Solutions as name of Pension Fund).
Also, now the pension fund would be required to furnish compliance certificate to the regulator, sources said.
The latest PFRDA move to amend the pension fund regulations comes in the wake of Finance and Corporate Affairs Minister in her last year’s Budget speech directing regulators to review their regulations from the perspective of easing compliance burden.
Aided by raging bull market in equities and strong interest from non -government sector, pension assets (National Pension System and Atal Pension Yojana) have crossed ₹ 11 lakh crore.
NPS took six years and six months to reach the milestone of ₹1-lakh crore AUM after its implementation in 2009. It then took 4 years and 11 months to further increase AUM to ₹5-lakh crore. NPS AUM had doubled to ₹10-lakh crore in August 2023 in a span of just 2 years and 10 months. There are ten licensed pension fund managers in the country.
PFRDA Chairman Deepak Mohanty had expressed confidence that pension assets will surpass ₹ 12 lakh crore by end March 2024.
Already over 8 lakh new subscribers have joined NPS this fiscal. PFRDA is targeting 13 lakh new subscribers on the non-government sector this fiscal.
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