PFRDA Act 2013 || Pension Fund Regulatory and Development Authority Act 2013

PFRDA ACT 2013PFRDA Act 2013 || Pension Fund Regulatory and Development Authority Act 2013. . The PFRDA Act of Parliament received the assent of the President on the 18th September, 2013, and is published for general information. An Act to provide for the establishment of an Authority to promote old age income security by establishing, developing and regulating pension funds, to protect the interests of subscribers to schemes of pension funds and for matters connected therewith or incidental thereto. As per Chapter I of the Act, This Act is called as the Pension Fund Regulatory and Development Authority Act, 2013.It extends to the whole of India.

Key Points of Pension Fund Regulatory and Development Authority Act (PFRDA) 2013

As Per Chapter-III of the Act 
Rule 12.
(1) This Act shall apply to: (a) the National Pension System; (b) any other pension scheme not regulated by any other enactment.
(2) Every pension scheme referred to in clause (b) shall conform to the regulations made by the Authority within such time as may be specified in the regulations.
(4) Notwithstanding anything contained in sub-section (3), any State Government or administrator of a Union territory may, by notification, extend the National Pension System to its employees.
(5) Notwithstanding anything contained in clause (c) of sub-section (3), the Central Government may, by notification, extend the application of this Act to any other pension scheme [including any other pension scheme exempted and notified under clause (c) of subsection (3)].
(6) Any person governed under any of the schemes or funds referred to in sub-section (3) may, at his option, also join the National Pension System.

As per Chapter VI of the Act - National Pension System

Rule 20.
    (1) The contributory pension system notified by the Government of India in the Ministry of Finance vide notification number F. No. 5/7/2003-ECB&PR, dated the 22nd December, 2003, shall be deemed to be the National Pension System with effect from the 1st day of January, 2004, and such National Pension System may be amended from time to time by regulations.
      (2) Notwithstanding anything contained in the said notification, the National Pension System shall, on the commencement of this Act, have the following basic features, namely:–
  1. (a) every subscriber shall have an individual pension account under the National Pension System;
  2. (b) withdrawals, not exceeding twenty-five per cent. of the contribution made by the subscriber, may be permitted from the individual pension account subject to the conditions, such as purpose, frequency and limits, as may be specified by the regulations;
  3. (c) the functions of recordkeeping, accounting and switching of options by the subscriber shall be effected by the central recordkeeping agency;
  4. (d) there shall be a choice of multiple pension funds and multiple schemes:
  5. Provided that—
  6. (a) the subscriber shall have an option of investing up to hundred per cent. of his funds in Government Securities; and
  7. (b) the subscriber, seeking minimum assured returns, shall have an option to invest his funds in such schemes providing minimum assured returns as may be notified by the Authority;
  8. (e) there shall be portability of individual pension accounts in case of change of employment;
  9. (f) collection and transmission of contributions and instructions shall be through points of presence to the central recordkeeping agency;
  10. (g) there shall not be any implicit or explicit assurance of benefits except marketbased guarantee mechanism to be purchased by the subscriber;
  11. (h) a subscriber shall not exit from the National Pension System except as may be specified by the regulations; and
  12. (i) at exit, the subscriber shall purchase an annuity from a life insurance company in accordance with the regulations.
(3) In addition to the individual pension account mentioned in clause (a) of subsection (2), a subscriber may also, at his option, have an additional account under National Pension System having the features mentioned in clauses (c) to (g) of sub-section
(2) and also having the additional feature that the subscriber shall be free to withdraw part or all of his money at any time from the additional account.

Rule 21. (1) The Authority shall, by granting a certificate of registration under sub-section (3) of section 27, appoint a central recordkeeping agency:
Provided that the Authority may, in public interest, appoint more than one central recordkeeping agency.
(2) The central recordkeeping agency shall be responsible for receiving instructions from subscribers through the points of presence, transmitting such instructions to pension funds, effecting switching instructions received from subscribers and discharging such other duties and functions, as may be assigned to it under the certificate of registration or as may be determined by regulations.
(3) All the assets and properties owned, leased or developed by the central recordkeeping agency, shall constitute regulated assets and upon expiry of certificate of registration or earlier revocation thereof, the Authority shall be entitled to appropriate and take over the regulated assets, either by itself or through an administrator or a person nominated by it in this behalf:
Provided that the central recordkeeping agency shall be entitled to be compensated the fair value, to be ascertained by the Authority, of such regulated assets as may be determined by regulations:
Provided further that where the earlier revocation of the certificate of registration is based on violation of the conditions in the certificate of registration or the provisions of this Act or regulations, unless otherwise determined by the Authority, the central recordkeeping agency shall not be entitled to claim any compensation in respect of such regulated assets.

Rule 22. (1) The Authority may, by granting a certificate of registration under sub-section (3) of section 27, permit one or more persons to act as a point of presence for the purpose of receiving contributions and instructions, transmitting them to the Trustee Bank or the central recordkeeping agency, as the case may be, and paying out benefits to subscribers in accordance with the regulations made by the Authority from time to time in this regard.
(2) A point of presence shall function in accordance with the terms of its certificate of registration and the regulations made under this Act.

Rule 23. (1) The Authority may, by granting a certificate of registration under sub-section (3) of section 27, permit one or more persons to act as a pension fund for the purpose of receiving contributions, accumulating them and making payments to the subscriber in such manner as may be specified by regulations.
(2) The number of pension funds shall be determined by regulations and the Authority may, in public interest, vary the number of pension funds:
Provided that at least one of the pension funds shall be a Government company.
Explanation.—For the purposes of this sub-section, the expression “Government company” shall have the meaning assigned to it in section 617 of the Companies Act, 1956.
(3) The pension fund shall function in accordance with the terms of its certificate of registration and the regulations made under this Act.
(4) The pension fund shall manage the schemes in accordance with the regulations.

Rule 24. The aggregate holding of equity shares by a foreign company either by itself or through its subsidiary companies or its nominees or by an individual or by an association of persons whether registered or not under any law of a country outside India taken in aggregate in the pension fund shall not exceed twenty-six per cent. of the paid-up capital of such fund or such percentage as may be approved for an Indian insurance company under the provisions of the Insurance Act, 1938, whichever is higher.
 Explanation.—For the purposes of this section, the expression “foreign company” shall have the meaning assigned to it in clause (23A) of section 2 of the Income-tax Act, 1961.

Rule 25. No pension fund shall, directly or indirectly invest outside India, the funds of subscribers.

Rule 26. The central recordkeeping agency, points of presence and pension funds, shall satisfy the eligibility norms as may be specified by the regulations, including minimum capital requirement, past track-record including the ability to provide guaranteed returns, costs and fees, geographical reach, customer base, information technology capability, human resources and such other matters.
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