The Pension Fund Regulatory and Development Authority (PFRDA) has tightened rules for fund managers, making it mandatory to get their investments and fees certified by auditors. The move aims at raising accountability and lowering chances of malpractices with long-term savings of employees.
The new rule mandates auditors to certify that PFMs? ?investments have been valued in accordance with the guidelines issued by PFRDA and transaction and claims raised by different entities are in accordance with the prescribed fee?.
Recently, PFRDA had decided to appoint a consultant to review the performance of pension fund managers as there were complains of accounts not being transparent. Moreover, the subscribers were not able to trace where their money was invested and how much return it yielded. The move gained significance in wake of the regulator allowing PFMs to invest directly into equities with a cap of 5% in a single company.
In a circular, PFRDA said the balance sheet and revenue account of the new pension scheme (NPS) must comply with PFRDA?s guidelines and the accounting standards notified under the Companies Act.
The auditor now has to submit a separate report called NPS scheme-detailed audit report (NPS-DAR) along with scheme audit report accounts for a particular financial year, PFRDA said. The audit report will have to be approved by the board of PFM. The board of directors of PFM will also have to submit a ?compliance report? within two months of the receipt of detailed audit report.