Savings Schemes
by 5paisa Research Team Last Updated: 2023-04-27T19:19:01+05:30


The PFRDA was established in 2003 to foster growth, oversee, and enhance India's pension sector. PFRDA full form is addressed as Pension Fund Regulatory and Development Authority. Initially, PFRDA's services were restricted to government employees, but later, they were extended to encompass all Indian citizens, including self-employed individuals and NRIs.

What is PFRDA?

As mentioned above, PFRDA is an organization that supervises the National Pension System (NPS) and the Atal Pension Yojana to assist individuals in planning for their superannuation. It has comparable capabilities to other monetary authorities like the SEBI (Securities and Exchange Board of India), RBI (Reserve Bank of India), IBBI (Insolvency and Bankruptcy Board of India), and IRDA (Insurance Regulatory Development Authority). Pension Fund Regulatory and Development Authority is a government entity that promotes and develops pension schemes. 

PFRDA Act 2013

In order to establish an interim pension scheme until a permanent and efficient structure could be endorsed by all political groups, including the opponents, the Interim Pension Fund Regulatory & Development Authority (IPRDA) was constituted by the Parliament in 2003. Pension Fund Regulatory and Development Authority, the definitive system, was founded on September 19, 2013, and it became a permanent Legislation. PFRDA was primarily under the President's control until the 2014–15 fiscal year, when it attained complete autonomy and started operating autonomously. 

Functions of PFRDA

Through founding, expanding, and managing pension funds, the PFRDA intends to enhance the safety of income for senior citizens. Moreover, it is in charge of defending the rights of pension scheme members and handling any ensuing problems or associated difficulties.

PFRDA is head-quartered at New Delhi with various regional offices spread across the country

There are several responsibilities of PFRDA that provide various types of advantages to people. Let’s have a look at them. 

●    Administering the PFRDA Act's National Pension System (NPS) and other pension initiatives
●    Creating, expanding, and managing pension funds
●    Defending the objectives of pension fund participants
●    Accreditation and supervision of facilitators
●    Setting standards for the management of pension fund assets and approving plans, terms, and conditions
●    Providing subscribers with a means for resolving complaints
●    Promoting groups for professionals connected to the pension system
●    Resolving disagreements between middlemen and subscribers as well as among intermediates
●    Public pension and retirement savings education, as well as intermediary training
●    Controlling pension fund assets
●    Contacting proxies and other entities connected to pension funds to undertake queries, probes, and reviews, as well as to collect information.
●    To encourage retirement planning and meet the income needs of retired workers, both mandatory and optional pension schemes should be promoted in the country. 
●    The PFRDA oversees and manages the National Pension System, which consists of both tier 1 and tier 2 schemes.
●    As part of its responsibilities, the PFRDA hires various intermediaries such as Pension Fund Managers and the Central Record Keeping Agency (CRA).


Intermediaries Under PFRDA

The PFRDA has chosen a group of intermediaries to help with activities including planning, assembling, managing, documenting, and allocating monies. An outline of these mediators can be found beneath:

Central Record Keeping Agency (CRA)

One of the providers designated by PFRDA is in charge of keeping track of transactions, overseeing finances, carrying out administrative duties, and providing Pension Fund subscribers with customer support. National Securities Depository Ltd. (CRA1) and Karvy Computershare Private Ltd. (CRA2) are the two CRAs that PFRDA has designated to fulfill these responsibilities.

●    Private-sector employers with pension-subscribing employees can opt for either of the two CRAs.
●    Voluntary subscribers who are not employees can independently select one of the two CRAs. The government can select a CRA for pension-subscribing employees in the government sector and those enrolled in the Atal Pension Yojana. 
●    The aggregator is responsible for choosing one of the two CRAs for NPS subscribers.

Here's a brief explanation of the CRA's job as an intermediary between PFRDA and the public:

●    It issues PRAN cards and maintains the PRAN database, tracking subscriber transactions. 
●    The CRA ensures the unitization of contributions made by subscribers in favor of Pension funds. It receives and collects relevant information from subscribers and passes it on to other intermediaries, such as the Trustee bank. 
●    The CRA oversees the settlement of invested funds and the distribution of units to subscribers. Additionally, the CRA offers users a range of services, including customer call centers, a centralized grievance management system, and withdrawal requests.

Online Services of PFRDA

The Pension Fund Regulatory and Development Authority has implemented various measures online to simplify the process of investing in pension schemes, including:

●    Opening an NPS account
●    Contributing to the PRAN account (excluding NPS-Swavalamban and Atal Pension Yojana accounts)
●    Activating a Tier-II account, a voluntary savings facility with no restrictions on withdrawals and no tax benefits
●    Modifying personal details on the database
●    Modifying investment patterns
●    Changing pension funds (excluding government subscribers and certain corporate subscribers)

●    Downloading transaction statements at any time, with physical copies typically sent to subscribers once a year and soft copies periodically delivered to registered email addresses
●    Submitting exit/withdrawal requests
●    Filing complaints
●    Printing e-PRAN

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Frequently Asked Questions

The PFRDA is a legislative act that forms an institution with the goal of fostering economic security for the aged via the creation, development, and regulation of pension funds. It also strives to protect pension fund subscribers' rights and handle any relevant difficulties.

Established in 2003 as a provisional authority, the PFRDA gained legislative legitimacy through the launch of the PFRDA Bill in 2011. This act establishes the Pension Fund Regulation and Development Authority's powers, functions, and obligations and a structure for India's old-age pension system.

Under the Indian Trusts Act of 1882, the PFRDA formed the NPS Trust as an intermediary to monitor and administer NPS money.

The National Pension Plan is a pension scheme accessible in India that is administered by the Pension Fund Regulatory and Development Authority.