The Pension Fund Regulatory and Development Authority Act, 2013 is an Act of the Indian Parliament that provides for the establishment of a statutory authority to regulate and develop the pension sector in India. The Act was passed by Parliament and received the assent of President Pranab Mukherjee on September 19, 2013, and was notified on February 1, 2014. Its primary objective is to promote old-age income security by establishing, developing, and regulating pension funds and protecting the interests of subscribers.
The Act solved the problem of a lack of a unified regulatory framework for pension schemes, which were previously managed by multiple agencies. Its history traces back to the OASIS (Old Age Social and Income Security) report of 1999, which led to the formation of the Interim Pension Fund Regulatory and Development Authority (PFRDA) in August 2003. The 2013 Act replaced the earlier, imperfect Interim PFRDA Bill of 2003, granting the PFRDA full statutory powers.
The Act's mechanism centers on the establishment of the Pension Fund Regulatory and Development Authority (PFRDA) as a corporate body under Section 3. Key provisions include Section 20, which establishes the National Pension System (NPS), a defined contribution scheme, and Sections 22-23, which define the roles of key intermediaries like the Central Recordkeeping Agency (CRA), Points of Presence (PoP), and Pension Funds. The PFRDA regulates major schemes like the NPS and the Atal Pension Yojana (APY).
The Act connects to the National Pension System (NPS), which it regulates, and the Ministry of Finance, under whose jurisdiction the PFRDA operates. It also connects to the Securities and Exchange Board of India (SEBI), as the PFRDA has recently aligned its governance norms for NPS investments with SEBI's framework on insider trading. Recent changes include the notification of the National Pension System Trust (Second Amendment) Regulations 2023 and Pension Fund (Amendment) Regulations 2023 in February 2024, which simplify provisions for the governance of Pension Funds in line with the Companies Act, 2013. These amendments also introduced a 'fit and proper person' criteria for Principal Officers and mandated the constitution of additional Board committees like the Audit Committee.