Lok Sabha passes PFRDA Bill 2011
The Pension Fund Regulatory and Development Authority Bill (PFRDA), 2011 which aims to regulate the New Pension System (NPS) has been passed in the Lok Sabha with official amendments. The bill was introduced in the lower house in March 2011 to provide for a statutory regulatory body. Currently the PFRDA has a non-statutory status. The legislation seeks to empower PFRDA to regulate the New Pension System (NPS).
Some highlights of PFRDA Bill 2011:
- It provides subscribers a wide choice to invest their funds for assured returns by opting for government bonds as well as in other funds depending on their capacity for risk.
- It allows for withdrawals from the individual pension account subject to the conditions, such as, purpose, frequency and limits, as may be specified by the regulations.
- It makes the Pension Fund Regulatory and Development Authority a statutory authority. Presently, it has non-statutory status.
What is the main reason behind providing PFRDA a statutory status?
NPS which is compulsory for government employees (except defence) has been launched for all citizens of the country including un-orgnised sector workers, on voluntary basis, with effect from May 1, 2009. Further, the Government has launched the co-contributory pension scheme titled “Swavalamban Scheme” in the Budget of 2010-11. Currently, 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, establishment of a statutory PFRDA with well defined powers, duties and responsibilities is considered absolutely necessary and would benefit all NPS subscribers.