Pension Fund Regulatory and Development Authority to bring all exempt pension funds under its ambit

NEW DELHI: The pension sector regulator is looking to bring all exempt pension funds, such as superannuation funds run by some companies for their employees, under its ambit.
The Pension Fund Regulatory and Development Authority (PFRDA) has already sought details from all trusts that operate such funds. The authority is of the view that there is a grey area on the regulation of the superannuation funds.

“We need to bring these fund under a permanent regulatory jurisdiction. We have sought information from various stakeholders and after that, if need, we will have a relook at the policy level,” said newly appointed PFRDA chairman Hemant Contractor. Under the current structure, insurers or fund managers manage the superannuation fund of the companies have their own schemes. Such funds are either created under the Employees’ Pension Scheme (EPS) or follow independent rules. At present, 8.33% of employer’s monthly contribution to the employee provident fund is diverted towards EPS.

“The PFRDA Act applies to any pension scheme which is not regulated by any other enactment,” said Contractor. The regulator is mandated with development and regulation of the pension sector in India and manages the National Pension System , a defined contribution scheme that has about 75 lakh subscribers and a corpus of.`63,511 crore. The PFRDA Act has been notified in February 2014.

“We need to examine under which regulatory regime these superannuation funds operate, their investment policy, key management, assets and their coverage,” said another PFRDA official. The PFRDA chairman, however, clarified that the Employees’ Provident Fund Organisation will not fall under its jurisdiction as it is exempted under the PFRDA Act.