Key features of PFRDA Bill 2011

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The Pension Fund Regulatory and Development Authority (PFRDA) Bill 2011 pending since nearly a decade was cleared yesterday by the lower house of the parliament. Some of the highlights of the PFRDA Bill 2011 are as though:

- The PFRDA Bill 2011 will grant statutory powers to Pension Fund Regulatory and Development Authority (PFRDA), the regulatory authority for pension in India, for promoting the pension sector and extending the benefits of pension to a larger section of society.

- Allows 26% FDI in pension funds to boost investment sentiment.

- Bill shall allow investment of the total corpus of NPS of Rs 35,000 crore. Commenting on the investment of   the corpus amount, P. Chidambaram was quoted saying "Rs 35,000 crore should not be used by un-statutory authority. All this Bill does is make un-statutory authority, a statutor authority...with powers to penalise".

- A minimum of one fund manager to be from the public sector.

- PFRDA Bill 2011 entrusted the regulator with the duty to ascertain that fund managers provide a minimum of one fund that offers minimum assured returns. As a result, subscribers with low risk-appetite shall be allowed to invest their corpus in schemes investing in funds offering assured minimum returns.

- Provide for pure pension products

- Withdrawals from personal pension account shall be allowed with certain caps pertaining to purpose, frequency and amount of withdrawal.

- Provisions related to withdrawal from Tier-I pension account for specific purposes shall serve as an incentive for subscribing to NPS.

- Pension bill shall assist in channelizing funds into infrastructure sector.

Read more about: pension, pension bill, pfrda, nps
Story first published: Thursday, September 5, 2013, 12:51 [IST]
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