PFRDA - Pension Fund Regulatory & Development Authority

The preamble of PFRDA states that the aims of the authority is – “to promote old age income security by establishing, developing and regulating pension funds, to protect the interests of subscribers to schemes of pension funds and for matters connected therewith or incidental thereto.”

PFRDA is head-quartered at New Delhi with various regional offices spread across the country.

1. Promote pension scheme in the country by fostering mandatory as well as voluntary pension schemes in order to serve the old age income needs of retired personnel
2. National Pension System, both tier 1 and tier 2 are under the purview of PFRDA and are dictated by the same
3. PFRDA performs the function of appointing various intermediate agencies like Pension Fund Managers, Central Record Keeping Agency (CRA) etc.
4. Educating the general public and stakeholders about the importance of pension.
5. Training of intermediaries that perform the task of popularizing and educating people about the importance of pension.
6. Addressing grievances related to various pension schemes in the country.
7. Addressing and resolving disputes between various intermediaries like banks and between customers and intermediaries.
   

Intermediaries of PFRDA

The Pension Fund Regulatory and Development Authority is divided into three sub-divisions, each of which performs a task to add on to the holistic responsibility of PFRDA towards the Indian citizen. These three sub-bodies are as listed below.

Central Record Keeping Agency (CRA)

Central Record Keeping Agency performs the following functions –

1. Administration and record-keeping of all information of customers who are registered under the National Pension System
2. Issuing of PRAN or Permanent Retirement Account Number for customers who have availed savings plan under the National Pension Scheme
3. Acting as an operational intermediary between PFRDA and other entities like Pension Funds, Trustee Bank etc.
4. Monitoring contributions of NPS subscribers and updating various intermediaries about the same
5. Furnishing periodic and updated PRAN statements to all subscribers on a regular basis
6. Overseeing the settlement of funds that have been invested and the subsequent units allotted to subscribers

Pension Fund Managers (PFMs) 

Listed below are some of the most important functions of the PFMs.

1. Pension Fund Manager essentially are mandated to invest and manage funds of subscribers enrolled in the National Pension System
2. Investment of contribution of subscriber as per rules and guidelines of the PFRDA
3. Maintain books and records of the investment and flow of funds
4. Construction of portfolio of customers who choose auto-allocation of funds
5. Reporting to PFRDA on a regular basis
6. Public disclosure of financial information from time to time as per guidelines issued by PFRDA

Point of Presence Agencies (PoPs) 

The third and the most public-facing entity of the PFRDA is the Point of Presence Agencies. Following are the functions that it performs.

1. Receive and analyse the duly filled application form along with KYC documentation, furnished by customers who register for the NPS scheme
2. To verify KYC documents as and when required
3. To collect and verify NPS contributions made by subscribers via various channels like cash, Demand Draft, cheques and so on
4. To deduct and collect NPS application fee and to furnish receipt of the same to the subscribers
5. To upload contribution files of subscribers on to the Central Record-Keeping Agency system
6. To maintain records of all transactions that happen for various NPS accounts of customers
7. Carry out changes in subscriber details as per requests made by subscriber
8. Handle requests and complaints with regards to contributions made towards NPS and other such request

NPS New withdrawal rules 

According to the revised regulations, individuals enrolled in the National Pension System (NPS) are restricted from withdrawing more than 25 percent of their personal contributions to their pension account, excluding the employer's contribution.  

Moreover, members can initiate partial withdrawals from their subscription only up to three times during their entire subscription period. To be eligible for a partial withdrawal, individuals must have been enrolled in this program for at least three years.  

Do note that, the partial withdrawals from the National Pension System (NPS) are sanctioned for specific purposes, including funding educational expenses for children, covering marriage costs, financing house construction, or addressing medical emergencies. 

In accordance with the latest regulations, participants are allowed to opt for partial withdrawals under the following circumstances: 

1. Funding higher education fees for the subscriber's children, including legally adopted children. 
2. Covering marriage-related expenses for the subscriber's children, also applicable for legally adopted children. 
3. Utilising funds for the purchase or construction of a residential house or apartment in the subscriber's name or jointly owned. 
4. Addressing medical expenses associated with specific illnesses such as cancer, kidney failure, primary pulmonary arterial hypertension, multiple sclerosis, major organ transplant, coronary artery bypass graft, and other specified conditions. 
5. Managing medical and incidental expenses resulting from the subscriber's disability or incapacitation. 
6. Meeting costs related to skill development or re-skilling. 
7. Covering expenses incurred by the subscriber for the establishment of their venture or any start-up. 

Other clauses for partial withdrawals: 

The other clauses for partial withdrawals are as follows: 

1. To be eligible for partial withdrawal, subscribers must maintain their NPS membership for at least three years from the date of enrollment. 
2. The maximum partial withdrawal amount is capped at one-fourth (25%) of the total contributions made by the subscriber in their pension account. 
3. Subsequent partial withdrawals are permitted, but only from the incremental contributions made by the subscriber since the date of the previous partial withdrawal. 

How can a subscriber apply for partial withdrawal? 

1. Subscribers must initiate their withdrawal request by submitting it to the Central Recordkeeping Agency (CRA) via their designated government nodal office or point of presence. This request must be accompanied by a self-declaration clarifying the reason for withdrawal. 
2. In the case of illness, a family member can act on behalf of the subscriber and submit a withdrawal request. Upon receiving the withdrawal request, the Point of Presence or Government Nodal Office will ascertain the eligible recipient. 

Trustee Bank

This is also one of the intermediaries of PFRDA. Following are the tasks that this agency performs

1. Receives funds for NPS from all over the country via zonal and regional offices
2. Verifies amounts paid by the zonal offices
3. Fund transfers with discrepancy are returned to zonal office or bank involved and correct transfers are sought
4. Prepares Fund Receipt Information by consolidating all funds received to NPS
5. Transfer funds according to instructions by CRA for settlement of funds for various entities
6. Reconcile daily balances in accordance with CRA
7. Maintain records of contributions by nodal offices and other documents pertaining to the same

Custodian

1. Does the job of maintaining accounts of securities and assets held by customers
2. Collecting accrued benefits on securities and assets
3. Acting as a Domestic Depository and performing functions related to the same
4. Informing about the actions that are to be taken or have been taken by issuer of securities
5. Maintains and reconciles records of services

Nodal offices

Nodal offices are an important link in the spread and reach of NPS schemes. These are the numerous links that join up to make the robust PFRDA.

1. Central Government nodal offices perform the task pf interacting with CRA on behalf of customers for the purposes of NPS
2. State Government Nodal Offices too, perform the same task but under a smaller node

Aggregators

Aggregator can be understood as the most prominent and first point of contact between subscriber and the NPS – Swavalamban scheme.

1. Responsible for carrying out changes in any of the KYC information as requested by subscriber. This includes change in name, address, contact information etc.
2. Grievance handling in cases where subscriber raises a complaint or grievance against any of the intermediaries of the PFRDA.

Apart from the above listed intermediaries, banks that is both public and private ones are also responsible to a certain extent for popularizing and opening of NPS Accounts of subscribers in the country. The main aim of the government behind running the Pension fund regulatory and development authority and subsequent NPS schemes is to make sure that citizens have a certain pension fund to fall back on when they retire from their jobs (government or private).

Grievance Redressal Mechanism under PFRDA Regulations 2015

The details of the Ombudsman appointed are available on the PFRDA website – www.pfrda.org.in. 

At present, Shri Narender Kumar Bhola has been appointed as the new Ombudsman in terms of the PFRDA (Redressal of Subscriber Grievance) Regulations, 2015. 

Details of the ombudsman are as given below: 

Shri Narender Kumar Bhola 

Pension Fund Regulatory and Development Authority  

B-14/A, Chatrapati Shivaji Bhawan,  

Qutab Institutional Area, Katwaria Sarai, New Delhi- 110016  

Chhatrapati Shivaji Bhawan,  

Email ID: ombudsman@pfrda.org.in  

Landline No.: 011 -26517507 (Ext : 188)