PFRDA, NPS Trust ready for separation, awaiting amendment in Act by Parliament

By: |
August 05, 2021 4:45 PM

Finance Minister Nirmala Sitharaman had announced to separate the NPS Trust from the PFRDA with appropriate organisational structure, keeping in view the wider interest of the subscribers.

Total enrollment grew by nearly 23% (thanks to Atal Pension Yojana and individuals) in FY21 and by about 7% from March 31 till August 28, to the current number of 4.53 crore.Total enrollment grew by nearly 23% (thanks to Atal Pension Yojana and individuals) in FY21 and by about 7% from March 31 till August 28, to the current number of 4.53 crore.

The PFRDA and NPS Trust are ready for their proposed separation and have deliberated upon their specific work areas post segregation, and the final go-ahead in the matter is awaited as Parliament has to amend the PFRDA Act, a top official has said.

It is expected that the bill for the amendment in the Act may get passed in the ongoing monsoon session of Parliament.

The separation is subject to the approval of the bill for amendment in the PFRDA Act, Supratim Bandyopadhyay, Chairman, Pension Fund Regulatory and Development Authority (PFRDA), told PTI.

“What we have done is that now the Trust is allowed to recruit people. Almost 14-15 people have been recruited by them and in the next couple of months they will recruit 5 more people, taking the total employees count of 20 of their own, which was not there earlier.

“So we are ready for the separation. And together, we have decided what are the jobs to be carried out by them (NPS Trust) exclusively and what are the things to be looked into by PFRDA,” he said.

Earlier, the NPS Trust was housed in PFRDA building, but that bifurcation has also been done and they have shifted to another building.

They got a new CEO a few months back and he is taking care of the progress (related to separation), Bandyopadhyay said.

Finance Minister Nirmala Sitharaman had announced to separate the NPS Trust from the PFRDA with appropriate organisational structure, keeping in view the wider interest of the subscribers and to maintain arm’s length relationship of the NPS Trust with the regulator.

The trust was established by the PFRDA for taking care of the assets and funds under the NPS. The proposal to separate the two job roles has been under consideration for the last some years.

The PFRDA is also awaiting amendment in the Act related to regulation of superannuation funds, the official said.

“That is part of our PFRDA Amendment Bill that is supposed to go to Parliament. One of the proposals is that superannuation funds which are not regulated by anybody, should be allowed to be regulated by us,” he added.

Even as these funds work under certain conditions laid by the Department of Economic Affairs (DEA) in the finance ministry, somebody has to check as to how they are managing the funds and if the subscribers are getting the benefits in the right manner or not.

“There is nobody to check them if they are not coming under the regulatory ambit of anyone. They have investment guidelines given by the DEA, however, if they are following the guidelines or not, nobody can check,” he said further.

The PFRDA, which runs two flagship schemes NPS and APY under its fold, is targeting to reach an AUM (asset under management) of Rs 7.5 lakh crore by the end of the current fiscal year.

The authority also aims to add another 10 million (1 crore) subscribers by the end of March 2022, Bandyopadhyay said.

Its AUM stood at Rs 6.27 lakh crore and subscribers at 4.4 crore by July 24.

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