PFRDA approves draft new regulations for pension sector
26 May 2014
The Pension Fund Regulatory and Development Authority (PFRDA) has approved a new set of regulations that could help in institution building, developing market infrastructure besides customer protection in the pension sector.
The PFRDA board approved the drafts of five regulations, including those governing points of presence (POP), aggregators, grievance redress, subscribers' education and protection fund, and pension fund advisory committee.
These regulations, which are being framed for the first time since the pension regulator received statutory backing last year, will be finalised after a detailed discussion with stakeholders.
The draft of these regulations will now be put out for public / industry comments, reports quoting RV Verma, acting chairman of PFRDA, said.
Under the proposed framework, each of the intermediaries will need to be registered with the PFRDA. The new regulations also empower PFRDA with powers to take punitive action in case of any market misconduct by intermediaries in areas such as POP.
The new regulations, however, do not cover pension fund managers and the PFRDA board is expected to look into this regulation at its next meeting.
The meeting is also expected to examine the Delhi High Court's directions in the matter of selecting pension fund managers for the private sector National Pension System (NPS).
The court's decision to set aside PFRDA's decision of rejecting HDFC Life's bid under the request for proposal (RFP) for selection of pension fund managers has prompted PFRDA to propose fresh bids for selection of pension fund managers.
The court is understood to have directed PFRDA to evaluate HDFC Life's bid in accordance with the steps outlined in the RFP.
HDFC Life Insurance had filed a writ petition in the Delhi High Court challenging what it considered as PFRDA's wrongful disqualification of its bid.
HDFC Pension Management Co, a wholly-owned subsidiary of HDFC Life Insurance, was among the 10 bidders that had evinced interest in managing the NPS for the private sector. But its bid was summarily disqualified by the PFRDA on technical grounds.
Reliance Capital's pension fund management subsidiary had emerged as the lowest bidder when commercial bids were opened by PFRDA.
This subsidiary had bid at a fund management fee of one paisa for every Rs100 of assets under management. PFRDA had then asked other bidders to match the lowest bid.