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| Pension regulator seeks advisors to fix norms |
| BS Reporter / Mumbai Sep 02, 2009, 00:38 IST |
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 With the government expected to push for the passage of the Bill to provide legislative backing to the Pension Fund Regulatory and Development Authority (PFRDA), the regulator has decided to rope in professional advisors to finalise the guidelines for the sector.
The regulator has floated a request for proposal (RFP) to appoint these advisors who would help it prepare guidelines that would govern the stakeholders involved in the New Pension Scheme (NPS) — fund managers, central recordkeeping agency, points of presence, trustee bank and the custodian. The regulations would also cover the NPS Trust.
At present, NPS has been undertaken through agreements between the NPS Trust and the stakeholders. Immediately after the passage of the PFRDA Bill, necessary regulations are to be notified under the PFRDA Act, the RFP said.
The institutional advisors, who would be selected through a bidding system, have to provide technical inputs in framing of regulations on suspension or cancellation of certificate of registration of intermediaries.
PFRDA also intends to put in place regulations on fees and charges and investment of funds.
At present, the regulator has provided various options for investment and, in due course, more options could be provided to investors.
Further, a set of guidelines that would cover pension schemes that are not covered by any other law is proposed to be put in place to ensure that investor interests are protected.
Over a period of time, PFRDA intends to bring pension schemes offered by insurance companies, provident funds and mutual funds under its ambit.
The discussions on this are proposed to be started after the Bill, which was introduced in Parliament by the previous United Progressive Alliance government, is passed.
The regulatory body is expected to issue guidelines on grievance redressal and maintenance of account books.
In addition, a Subscriber Education and Protection Fund is proposed to be formed and the advisors would help frame the guidelines.
The advisors would be given three months to prepare the guidelines and PFRDA intends to ensure that the proposed norms on “major activities” such as investment, fees and charges, regulations of intermediaries are completed in the first two months of the contract.
PFRDA last year decided to go ahead with a pension scheme for non-government employees based on agreements with stakeholders. Last year, three professional fund managers - LIC, UTI and SBI - were appointed to manage the contribution made by central government employees who joined from January 2004.
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