The Pension Fund Regulatory and Development Authority (PFRDA), the pension regulator of India, has doubled the minimum net worth criterion for pension fund managers to Rs 50 crore from Rs 25 crore.
In order to comply, existing pension fund managers will have to meet this requirement within PFRDA's stipulated time. This revision puts pension funds at par with mutual funds, which also have to meet a minimum net worth requirement of Rs 50 crores as per SEBI norms.
The PFRDA notification published in the Official Gazette on 4 February, also made a provision for licenses to have indefinite validity, which means that licenses of pension fund managers will remain valid until cancelled by the regulator. Previously, these were granted for a period of five years.
The notification further said that a pension fund or its sponsor cannot acquire an equity stake in another pension fund. However, existing pension funds who have such cross-holdings can continue with the same but cannot increase their stake without permission from the regulator.
In her Union Budget speech, Finance Minister Nirmala Sitharaman said necessary amendments would be carried out in PFRDA Act to strengthen its role as a regulator and also facilitate separation of NPS (National Pension Scheme) trust for government employees from PFRDAI.