Lok Sabha Passes Pension Fund Regulatory and Development Authority
Bill, 2011 with official amendments
Subscribers Seeking
Minimum Assured Returns Allowed to OPT for Investing their Funds in such Scheme
Providing Minimum Assured Returns
The Pension Fund Regulatory
and Development Authority Bill (PFRDA), 2011 was passed by the Lok Sabha today
(04.09.2013) with official amendments. It was earlier introduced in Lok Sabha
on the 24th March, 2011 to provide for a statutory regulatory body the Pension
Fund Regulatory and Development Authority (PFRDA) under the provisions of the
Bill. The legislation seeks to empower PFRDA to regulate the New Pension System
(NPS).
The PFRDA Bill, 2011
was referred to the Standing Committee on Finance on the 29th March, 2011 for
examination and report thereon. The Standing Committee on Finance gave its
Report on 30th August, 2011. Some of the key amendments incorporated in the
Bill based on the recommendations of the Standing Committee on Finance are as
follows:
a) That the subscriber
seeking minimum assured returns shall be allowed to opt
for investing his
funds in such scheme providing minimum assured returns as may be notified by
the Authority;
b) Withdrawals will
be permitted from the individual pension account subject to the conditions,
such as, purpose, frequency and limits, as may be specified by the regulations;
c) The foreign
investment in the pension sector at 26% or such percentage as may be approved
for the Insurance Sector, whichever is higher;
d) At least one of
the pension fund managers shall be from the public sector;
e) To establish a
vibrant Pension Advisory Committee with representation from all major
stakeholders to advise PFRDA on important matters of framing of regulations
under the PFRDA Act.
Beside above, the
Bill would make the Pension Fund Regulatory and Development Authority a
statutory authority. Presently, it has non-statutory status. The NPS is based
on the principle that ‘you save while you earn’ especially for retirement and
is mainly for those who have a regular income.
This Bill would also
provide subscribers a wide choice to invest their funds including for assured
returns by opting for Government Bonds etc. as well as in other funds depending
on their capacity to take risk.
The NPS has been made
mandatory for all the central Government employees (except armed forces)
entering service with effect from 1.1.2004. Twenty six (26) States have already
notified NPS for their employees. NPS has been launched for all citizens of the
country including un-orgnised sector workers, on voluntary basis, with effect
from 1st May, 2009. Further, to encourage the people from the un-organised
sector to voluntarily save for their retirement, the Government has launched
the co-contributory pension scheme titled “Swavalamban Scheme” in the Budget of
2010-11. As on 14th August, 2013, the number of subscribers under NPS is 52.83
Lakh with a corpus of Rs.34, 965 crore. In order to effectively invest and
manage huge funds belonging to a large number of subscribers and to ensure the
integrity of NPS, creation of a statutory PFRDA with well defined powers,
duties and responsibilities is considered absolutely necessary and would
benefit all NPS subscribers.
The PFRDA Bill
authorizes the PFRDA to establish a Pension Advisory Committee by notification
under Clause 44 of the PFRDA Bill, 2011. The object of the Pension Advisory
Committee shall be to advise the Authority on matters relating to the making of
the regulations under the PFRDA Act.
Market based returns and
wide coverage based on several investment options in the pension sector will
build up the confidence in the subscribers, whereas withdrawals for limited
purposes from Tier-I pension account will be an incentive for them to join NPS.
Courtesy:
(pib.nic.in) Press Information Bureau
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PENSION FUND REGULATORY & DEVELOPMENT
AUTHORITY (PFRDA) BILL 2011
Presented to LOK SABHA on 30 AUGUST 2011
Laid in RAJYA SABHA on 30 AUGUST 2011
DOWNLOAD
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PENSION FUND REGULATORY & DEVELOPMENT
AUTHORITY (PFRDA) BILL 2011
Presented to LOK SABHA on 30 AUGUST 2011
Laid in RAJYA SABHA on 30 AUGUST 2011
DOWNLOAD
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