Excerpt from TimesNowNews Article, Published on Feb 21, 2024
In a move aimed at enhancing governance and reducing compliance complexity, the Pension Fund Regulatory and Development Authority (PFRDA) has introduced significant amendments to the National Pension System Trust (NPST) and Pension Fund Regulations. The reforms, announced on February 5 and February 9, 2024, respectively, mark a strategic effort to streamline processes in alignment with the Companies Act, 2013. The revised regulations primarily focus on simplifying trustee appointment procedures, outlining their tenure and conditions, and optimizing the operational dynamics of the Board of Trustees and application processes of the National Pension System Trust. By aligning with the Companies Act, 2013, the amendments aim to foster smoother governance structures and bolster transparency in pension fund operations.
Key provisions of the amendments include clearly defined roles for the Sponsor of Pension Fund & Pension Fund, ensuring adherence to the ‘fit and proper person’ criteria. Additionally, the regulations mandate the inclusion of ‘Pension Fund’ in the name clause and stipulate existing pension funds to comply with these regulations within a 12-month window. Moreover, the reforms necessitate pension funds to constitute additional board committees, including the Audit Committee and the Nomination & Remuneration Committee. Furthermore, pension funds are now required to furnish an annual report for schemes under their management, inclusive of a statement of responsibility from the directors.
These regulatory changes are part of a broader initiative to align with the objectives outlined in the Union Budget 2023–24. By reviewing regulations, the aim is to mitigate compliance costs and foster a conducive environment for conducting business, thereby promoting the ease of doing business. The PFRDA’s proactive measures underscore a commitment to fostering a robust pension fund ecosystem while ensuring regulatory compliance and transparency across the sector. The revised regulations are expected to streamline processes, enhance governance standards, and bolster investor confidence in the pension fund industry.
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