PFRDA, government in talks to change law to cover pension funds

NEW DELHI: The government and the Pension Fund Development and Regulatory Authority (PFRDA) are discussing amendments to the law to ensure the regulation of a large number of pension funds that currently escape due scrutiny.
Although there are no official estimates, around 400 to 500 are considered “unregulated” pension funds, of which 50 to 60 are large players. There are at least three regulators for the pension sector, with PFRDA managing the National Pension System (NPS), while the insurance regulator deals with annuities sold by life insurers. Mutual funds also sell pension plans and are regulated by Sebi.
“To regulate pension funds that are not under the regulatory control of any financial regulator, we have proposed changes to the PFRDA law, which is in the consultation phase. We believe that regulatory oversight is necessary to ensure that the purpose for which the trust was created is achieved by the trustees and that the funds are managed in the best interests of its beneficiaries or employees, ”told YOU the president of the PFRDA, Supratim Bandyopadhyay.

Under the current regulatory structure, these funds receive approval from the income tax department and are required to follow the investment guidelines of the Ministry of Finance. Upon retirement of a member, annuities can be purchased resulting in regulation by the Indian Insurance Regulatory and Development Authority.
Under the proposed regulatory framework, funds will need to be registered with the PFRDA, which will oversee their investment and perform periodic checks to see whether or not regulations are being followed. “We want to protect the beneficiaries of such trusts and protect their retirement corpus. If the funds are managed properly in accordance with the investment guidelines notified by the government, they can continue to do so with our approval and if the business is not managed in the best interests of the employees, we would demand that trust join. NPS and follow our regulations, ”Bandyopadhyay said.
The debate over the regulation of these pension funds has been going on for several years, with the government – both the UPA and the NDA – having failed to put a framework in place. As a result, it is not clear whether investors’ lakhs retirement savings are being managed properly or not.

Source link

About Christopher Easley

Christopher Easley

Check Also

Balasore businessman detained for embezzling 6 million rupees in subsidies | Bhubaneswar News

BHUBANEWAR: A Balasore-based businessman was arrested on Friday for allegedly embezzling government subsidies to the …

Leave a Reply

Your email address will not be published. Required fields are marked *