PFRDA to revamp pension fund regulations, reduce cost of compliance
Pensions regulator PFRDA has issued a large number of proposed changes to the Pension Fund Regulations as part of its aim to increase ease of doing business and reduce compliance costs resulting in higher returns for participants.
Public comment is now invited on the draft proposals — more than 30 — by July 21. The FCA’s move to review and reform pension fund regulations follows Finance Minister Nirmala Sitharaman’s announcement in this year’s budget speech that financial sector regulators will be asked to undertake a comprehensive review of regulations to streamline, streamline and reduce the cost of compliance.
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is reading: NPS Regulations: The Pensions Regulator stepped in for a comprehensive review, forming two boards
PFRDA has now proposed changes that will streamline the governance standards for Pension Funds (PFs) in line with the Companies Act 2013 on the basis of Enhanced Disclosures for Pension Funds. The Authority proposes that the statement of responsibility of the members of the Board of Directors and the testimony of the Chief Executive Officer and the Chief Financial Officer be part of the financial statements of the scheme.
The CEOs and CFOs are to take responsibilities related to the preparation and presentation of the scheme’s financial statements to provide a true and valid view of the state of the system and the scheme NAV; Existence of adequacy and effectiveness of internal financial processes and digital architecture controls; Comply with the PFRDA Act, PFRDA (Pension Fund) Regulations, Investment Guidelines, Valuation Guidelines, Oversight Rules, Voting Policy and other applicable laws and adhere to a Code of Conduct and Ethics.
The Palestine Real Estate Finance Authority (PFRDA) has now given impetus to risk-based oversight and stipulated that general management assistants should form additional Board committees such as the Audit Committee and the Nomination and Remuneration Committee.
Proposed changes to the PF bylaws also include separating the roles of sponsor and PF and simplifying compliance requirements including agreeing to change in management/contribution pattern to sponsoring PF only in specific scenarios and insinuating only in remaining scenarios.
It is proposed to simplify the terms and definitions used in the regulations such as workday, compliance officer, key administrative staff, and sponsor.
Some interesting proposals include the stipulation that a PF director cannot be a director on the board of any other PF; ensuring that the pension fund is a “fit and proper person”; Requirement that the PF begin the process within six months of the date the certificate of registration is granted.
PFRDA also proposes providing that a sponsor or PF must obtain prior approval from PFRDA in the event of a merger, merger, takeover, or acquisition by sponsor that results in the acquisition of equity interest by sponsor or PF in any other retirement fund already registered with authority.
This move by PFRDA to bring about changes in its PF regulations comes at a time when the pension assets (NPS and APY) in the country are growing at a frantic pace of more than 20 per cent and have touched the level of ₹9.8-lakh crores as of July 1 this year.