The Aryavarth Express
Agency (New Delhi): The Pension Fund Regulatory and Development Authority (PFRDA) has officially updated the National Pension System Trust (Second Amendment) Regulations 2023 and the Pension Fund (Amendment) Regulations 2023, announced on February 5 and February 9, 2024, respectively.
These amendments are primarily aimed at streamlining the governance of Pension Funds, aligning them with the Companies Act of 2013. They also focus on improving the transparency and disclosure practices of Pension Funds. This move is in response to the Union Budget 2023-24’s commitment to revising regulations to lessen compliance costs and facilitate easier business operations.
Key changes in the NPS Trust Regulations include the simplification of procedures related to the appointment of Trustees, setting their terms and conditions, organizing Board of Trustees meetings, and appointing the CEO of the NPS Trust.
The revised Pension Fund Regulations introduce significant changes such as clearer delineation of roles between the Sponsor of the Pension Fund and the Pension Fund itself, along with adherence to the ‘fit and proper person’ criteria. Additionally, these amendments require Pension Funds to constitute additional Board committees, including an Audit Committee and a Nomination & Remuneration Committee.
A notable requirement is the inclusion of the term ‘Pension Fund’ in the name clause. Existing pension funds must comply with this provision within a 12-month period. Furthermore, the annual report of schemes managed by the pension fund will now include a Directors’ responsibility statement.
These amendments are designed to simplify processes and reduce compliance burdens for stakeholders. For more detailed information on the amended regulations, individuals are encouraged to visit the PFRDA’s official website.
This regulatory update is a significant step towards enhancing the governance and operational efficiency of the pension system in India, aligning it with contemporary corporate governance standards, and promoting greater clarity and accountability in the management of pension funds.