New Delhi: Government and Fund Management Authority & Development of Pension Fund (PFRDA) are discussing the legal amendment to ensure a large number of pension funds which currently runs away from the necessary supervision.
Although there is no official estimate, around 400-500 looks “not set” pension funds, with 50-60 become big players.
There are at least three regulators for retirement businesses, with PFRDA handling the National Pension System (NPS), while insurance regulators are related to the annuities sold by insurance companies.
Mutual funds also sell retirement schemes and arranged by SEBI.
“To regulate a pension fund that is not under the control of the regulation on each financial regulator, we have proposed a change in the PFRDA Law, which is under the consultation phase.
We argue that regulatory control is needed to ensure that the purpose of trust is being fulfilled by the people Trustees and funds managed with the best interests of the beneficiaries or employees, “said Chairman of the PFRDA Bandyopadhyay to Ti.
Under the current regulatory structure, this fund received approval from the Income Tax Department and was asked to take part in the Ministry of Finance’s investment guidelines.
At retirement from a member, annuity can be purchased, resulting in regulations by the Regulatory & Development Authority of Indian insurance.
Under the proposed regulatory framework, funds need to be registered with PFRDA, which will oversee their investment and conduct periodic checks whether the rules are being followed or not.
“We want to keep the beneficiaries of the trust and protect their retirement corpus.
If the funds are well managed in accordance with the investment guidelines that the government is notified, they can continue to do it with our approval and if the affair is not managed for the benefit of employees, we will need trust in Join NPS and follow our rules, “Bandyopadhyay said.
The debate about the Pension Fund Regulations has been going on for several years with the Government – both UPA and NDA – after failing to apply a framework.
As a result, there is no clarity whether the pension savings from the Lakh investor are well managed or not.