PFRDA has announced welcome changes to the National Pension System Trust and Pension Fund regulations, aiming to ease compliance burdens and improve transparency for stakeholders. This move, announced on February 5th and 9th, 2023, reflects the authority’s commitment to fostering a more efficient and business-friendly environment within the pension sector.
Simplified Provisions for NPS Trust
The amendments to the NPS Trust Regulations primarily focus on simplifying various provisions related to the appointment of Trustees, their terms and conditions, as well as the conduct of Board of Trustees meetings. Additionally, the amendments streamline the process for appointing the CEO of the NPS Trust, further enhancing operational efficiency.
Enhanced Governance for Pension Funds
Aligned with the Companies Act, 2013, the amendments to the Pension Fund Regulations aim to bolster governance mechanisms for Pension Funds. This includes clarifying the roles of both the Sponsor of Pension Funds and the Pension Funds themselves, ensuring compliance with the ‘fit and proper person’ criteria. Furthermore, the amendments necessitate the establishment of additional Board committees by Pension Funds, such as Audit Committee and Nomination & Remuneration Committee, to strengthen oversight and accountability.
Promoting Transparency and Compliance
To promote transparency and compliance, the amendments mandate the inclusion of the term ‘Pension Fund’ in the name clause of existing pension funds, with a grace period of 12 months for compliance. Additionally, Pension Funds are now required to incorporate Directors’ responsibility statements in the annual reports of schemes managed by them, further enhancing disclosure practices.
For detailed information on the amended regulations, stakeholders are encouraged to visit the PFRDA website and access the respective documents for NPS Trust and Pension Fund regulations.
