PFRDA Current Affairs - 2019

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OCI can now apply for National Pension System

The Overseas Citizens of India (OCI) will now be eligible to apply for National Pension System (NPS) at par with Non Resident Indians (NRIs). The permission to permit OCI to enroll in NPS was given by Pension Fund Regulatory and Development Authority (PFRDA). The decision is one of the endeavours of PFRDA towards promoting and developing NPS and increasing pension coverage in country.

Key Highlights

As per a notification issued by Finance Ministry, now, any Indian citizen, resident or non-resident and OCIs are eligible to join NPS till age of 65 years.

Condition: An OCI may subscribe to NPS provided such person is eligible to invest as per provisions of PFRDA Act and accumulated saving will be repatriable, subject to Foreign Exchange Management Act (FEMA) guidelines.

Till 26th of October 2019, the total number of subscribers under National Pension System (NPS) and Atal Pension Yojana (APY) has crossed 3.18 crores and Asset under Management has grown to over Rs.3.79 lakh crore. Subscribers enrolled under NPS includes more than 66 lakh government employees and 19.2 lakhs subscribers in private sector with 6,812 entities registered as corporates.

About National Pension System (NPS)

It was initially notified for Central government employees joining service on or after 1 January 2004. The NPS was subsequently adopted by almost all State Governments for its employees and was later extended to all citizens of India (on a voluntary basis) from May 2009, to corporates in December 2011 and to Non-Resident Indians (NRI) in October 2015.

A NPS subscriber can contribute regularly in a pension account during his/her working life, withdraw a part of corpus in a lumpsum and use remaining corpus to buy an annuity to secure a regular income after retirement.

In Union Budget 2019, the tax exemption limit under section 10(12A) of IT Act, for lump sum withdrawal on exit/maturity from NPS was increased from 40% to 60%. Moreover, the remaining 40% of corpus is already tax-exempt as it is mandatorily utilised for annuity purchase.

NOTE: PFRDA is a pension regulator of India. It administers and regulates National Pension System (NPS) and also administers Atal Pension Yojana (APY). It is a statutory authority established by PFRDA Act of Parliament, to promote, regulate and ensure orderly growth of NPS and pension schemes to which this Act applies.

FM chairs 20th Meeting of FSDC

The 20th Meeting of Financial Stability and Development Council (FSDC) was held under the Chairmanship of Smt. Nirmala Sitharaman, Union Minister of Finance and Corporate Affairs.

Key Highlights of Meeting

The Meeting reviewed current global and domestic economic situation, overall macro-economic situation and financial stability issues including those concerning Banking and Non Banking Financial Company (NBFC).

Council was also informed about progress made towards setting-up of Financial Data Management Centre (FDMC) under the aegis of FSDC, so as to facilitate integrated data aggregation and analysis as also a Computer Emergency Response Team (CERT-Fin) towards strengthening cyber security framework for financial sector.

Council also held consultations to obtain inputs and suggestions of Financial Regulators for Union Budget 2019-20. All the regulators presented their proposals for upcoming Budget. The financial sector regulators includes- SEBI (Capital Market), RBI (Monetary Sector), IRDA (Insurance), PFRDA (Pension) and IBC (Insolvency & Bankruptcy).

Council also took note of activities undertaken by FSDC Sub-Committee which is chaired by Reserve Bank of India (RBI) Governor and action taken by Members on decisions taken in earlier Meetings of FSDC.

What is Financial Stability and Development Council?

The FSDC was constituted in December 2010. It is apex body of sectoral regulators and not a statutory body.

Objective: to strengthen and institutionalise mechanism for maintaining financial stability, promoting financial sector development and enhancing inter-regulatory coordination.

Function: Among other things, it deals with issues relating to financial stability, financial literacy, financial inclusion, financial sector development, inter–regulatory coordination and macro prudential supervision of economy which also includes functioning of large financial conglomerates. No separate funds are allocated to Council for undertaking its activities.

FSDC Sub-Committee: It deliberates on agenda items proposed by any member of FSDC Council which mainly include matters relating to financial stability, inter-regulatory coordination, and financial sector development.