The Pension Fund Regulatory and Development Authority was established in India in ___________.
- AOption (a)
1992
- BOption (b)
2003
- COption (c)
2009
- DOption (d)
2012
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Correct answer
2003
Why this answer is correct
The correct answer is 2003.
Key Points
- The Pension Fund Regulatory and Development Authority (PFRDA) was established by the Government of India in the year 2003.
- The PFRDA was initially set up as an interim regulator for the National Pension System (NPS), which was introduced for government employees except for the armed forces.
- Its primary role is to regulate and develop the pension sector in India to promote old-age income security.
- In 2013, the PFRDA Act was passed by Parliament, giving statutory status to the authority. This provided a legal framework for the regulation of the NPS and other pension schemes.
- The PFRDA is responsible for overseeing the operations of pension fund managers, ensuring the protection of subscribers' interests, and promoting transparency in the pension sector.
Additional Information
- National Pension System (NPS):
- The NPS was launched on 1 January 2004 for government employees and later extended to all citizens in 2009.
- It is a voluntary, defined contribution retirement savings scheme designed to enable subscribers to make systematic savings during their working life.
- The NPS offers two types of accounts: Tier I (mandatory retirement account) and Tier II (voluntary savings account).
- Subscribers can choose from various pension fund managers and investment options as per their risk appetite.
- PFRDA Act, 2013:
- The PFRDA Act, 2013 provides a statutory framework for the functioning of the PFRDA and the regulation of the pension sector in India.
- It allows the PFRDA to regulate all pension schemes except those under the Employees' Provident Fund Organisation (EPFO) and other social security schemes under the government.
- The Act also ensures the protection of subscribers' interests by mandating transparency and fair practices in the pension sector.
- Functions of PFRDA:
- Regulating and promoting the National Pension System (NPS).
- Ensuring the safety and growth of pension funds through stringent regulations.
- Approving and monitoring Pension Fund Managers (PFMs) and other intermediaries.
- Encouraging financial literacy about retirement planning and pensions.
- Other Pension Schemes Managed by PFRDA:
- Atal Pension Yojana (APY): A government-backed pension scheme for the unorganized sector launched in 2015.
- Corporate NPS: A variant of the NPS designed for employees of corporate entities.
Important Points
- The PFRDA plays a crucial role in ensuring retirement income security for Indian citizens by promoting and regulating a sustainable and transparent pension market.
- The NPS Trust, under the PFRDA, manages the funds contributed by subscribers and ensures they are invested appropriately.
- The PFRDA is headquartered in New Delhi, India.
- The Swavalamban Scheme, which aimed to provide a pension scheme for workers in the unorganized sector, was later merged with the Atal Pension Yojana.