The Pension Fund Regulatory and Development Authority (PFRDA) has recently announced significant amendments to the National Pension System (NPS) Trust and Pension Fund regulations.
These changes, which come in the wake of the directives outlined in the Union Budget for 2023-24, seek to simplify compliance procedures and foster a more conducive environment for conducting business.
Among the key modifications, the revised norms pertaining to the NPS Trust entail a more straightforward process for the appointment of trustees, along with defining their terms and conditions.
Provisions have been made to facilitate the smooth conduct of Board of Trustees meetings and the appointment of the NPS Trust’s chief executive officer.
In a statement issued by the finance ministry on February 21, it was highlighted that the amendments to the Pension Fund Regulations aim to align governance practices with the Companies Act, 2013, while also emphasizing enhanced disclosure standards by pension funds.
This move is set to bolster accountability and transparency within the pension fund sector.
Furthe, the regulatory revisions mandate the inclusion of the term ‘Pension Fund’ in the name clause of relevant entities, with a grace period of 12 months provided for existing pension funds to comply with this requirement.
Amendments have been introduced concerning the annual reporting mechanism for schemes managed by pension funds.
These modifications entail the incorporation of a directors’ responsibility statement and the establishment of additional board committees, including audit and nomination and remuneration committees.
The overarching objective behind these regulatory amendments is to foster an environment conducive to the growth and development of the pension fund sector, while concurrently ensuring robust governance frameworks and heightened accountability standards.
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