PFRDA notifies amendments in NPS Trust, Pension Funds rules regarding trustees
The new rules are related to the related to appointment of trustees, their terms and conditions, holding of meetings of the Board of Trustees and appointment of CEO - NPS Trust, which is in line with the Companies Act, 2013.
- Feb 21, 2024,
- Updated Feb 21, 2024 1:54 PM IST
The Pension Fund Regulatory and Development Authority (PFRDA) has notified the National Pension System Trust (Second Amendment) Regulations 2023 and Pension Fund (Amendment) Regulations 2023 with amendments to NPS Trust Regulations. The new rules are related to the related to the appointment of trustees, their terms and conditions, holding of meetings of Board of Trustees and appointment of CEO - NPS Trust, which are in line with Companies Act, 2013 and enhanced disclosure by Pension Funds.
The other notable amendments inter alia include:
> Clarity of roles of Sponsor of Pension Fund & Pension Fund alongwith compliance to ‘fit and proper person’ criteria. > Constitution of additional Board committees by Pension Funds such as Audit Committee and Nomination & Remuneration Committee. > Inclusion of name ‘Pension Fund’ in name clause and requirement of existing pension fund(s) to comply with this provisions within a period of 12 months. > The annual report of schemes managed by the pension fund to include Directors’ responsibility statement.
Last week, PFRDA said it has brought pension funds within the ambit of Prevention of Money Laundering Act (PMLA), tightening the oversight on these entities.
The PFRDA as part of the latest amendments to the existing pension fund regulations introduced a concept of ‘fit and proper’ criteria for Principal Officers of both the sponsor and the pension fund.
The ‘fit and proper’ norms are similar to those prevalent under SEBI for ‘fit and proper’. PFRDA 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.
The most recent PFRDA action to modify the pension fund rules follows the Finance and Corporate Affairs Minister's directive in her Budget speech last year, urging regulators to reassess their rules to make compliance easier.
Government pension assets (National Pension System and Atal Pension Yojana) have crossed Rs 11 lakh crore this fiscal. NPS took six years and six months to touch the Rs 1-lakh crore AUM mark after its implementation in 2009. It then took 4 years and 11 months to further increase AUM to Rs 5-lakh crore. NPS AUM had doubled to Rs 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 Rs 12 lakh crore by end March 2024.
Also read: NPS new withdrawal rules from Feb 1: Check clauses, eligibility highlighted by PFRDA
The Pension Fund Regulatory and Development Authority (PFRDA) has notified the National Pension System Trust (Second Amendment) Regulations 2023 and Pension Fund (Amendment) Regulations 2023 with amendments to NPS Trust Regulations. The new rules are related to the related to the appointment of trustees, their terms and conditions, holding of meetings of Board of Trustees and appointment of CEO - NPS Trust, which are in line with Companies Act, 2013 and enhanced disclosure by Pension Funds.
The other notable amendments inter alia include:
> Clarity of roles of Sponsor of Pension Fund & Pension Fund alongwith compliance to ‘fit and proper person’ criteria. > Constitution of additional Board committees by Pension Funds such as Audit Committee and Nomination & Remuneration Committee. > Inclusion of name ‘Pension Fund’ in name clause and requirement of existing pension fund(s) to comply with this provisions within a period of 12 months. > The annual report of schemes managed by the pension fund to include Directors’ responsibility statement.
Last week, PFRDA said it has brought pension funds within the ambit of Prevention of Money Laundering Act (PMLA), tightening the oversight on these entities.
The PFRDA as part of the latest amendments to the existing pension fund regulations introduced a concept of ‘fit and proper’ criteria for Principal Officers of both the sponsor and the pension fund.
The ‘fit and proper’ norms are similar to those prevalent under SEBI for ‘fit and proper’. PFRDA 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.
The most recent PFRDA action to modify the pension fund rules follows the Finance and Corporate Affairs Minister's directive in her Budget speech last year, urging regulators to reassess their rules to make compliance easier.
Government pension assets (National Pension System and Atal Pension Yojana) have crossed Rs 11 lakh crore this fiscal. NPS took six years and six months to touch the Rs 1-lakh crore AUM mark after its implementation in 2009. It then took 4 years and 11 months to further increase AUM to Rs 5-lakh crore. NPS AUM had doubled to Rs 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 Rs 12 lakh crore by end March 2024.
Also read: NPS new withdrawal rules from Feb 1: Check clauses, eligibility highlighted by PFRDA