For Malayalam Lecture: https://youtu.be/53WD3wQJOy4 Course: CMA Intermediate, G1 Subject: Laws and Ethics Topic: Pension Fund Regulatory and Development Authority Act, 2013 Faculty: Asst. Prof. Mohammed Shafath KM (Managing Director, Capred CMA Campus) Different pension Schemes National Pension System (NPS) Point of Presence (POP) Central Recordkeeping Agency (CRA) Pension Fund Manager Section 20 to section 26 Previous year Question discussion What is NPS? Basic features of NPS. What is CRA. Functions of CRA. NSDL. Functions of NSDL. what is POP? Functions of POP? What is pension Fund? Functions of PF Manager. At present, How many Pension Fund Managers are there in India? 8 Pension Fund Managers in India.

1. Study Note 13
PENSION FUND
REGULATORY AND
DEVELOPMENT
AUTHORITY ACT,
2013
Asst. Prof. Mohammed Shafath K M
MBA | UGC NET | CMA Inter

2. Why PFRDA?????????
Different Pension Schemes
APY
Atal Pension Yojana
EPF
Employee Provident Fund
PPF
Public Provident Fund
NPS
National Pension System
Regulated By PFRDA
Government
Employees
All other Employees
Pension Scheme offered by
A. Banks
B. Insurance Co;

3. How it’s work?????????????
POP
Point of Presence
CRA
Central Recordkeeping
Agency
Pension Fund
Manager
Employee
(Govt/other)
Defined
Contribution &
Instructions
Invest in
(a) Govt.
Securities
or
(b) Minimum
assured
returns
Contribution
NSDL
Local Bank Branch or
Nearest bank
Instructions
There are 8 PF
Managers
• There are 3 entities in relation to PFRDA

4. Employee
(Govt/other)
Open 2 A/c
Tier I A/c
Non withdrawable
Tier II A/c
Withdrawable
25%
PRAN
(Permanent Retirement
Account Number)
CENTRAL RECORDKEEPING AGENCY (NSDL)
Tier I A/c +
Tier II A/c
Accumulated Balance +
Interest
XXXXX
(Total Pension Fund Under NPS)
Withdrawable Pension as
Annuity plans under NPS
Operations………..

5. Timeline of PFRDA
1999
GOI commissioned a
national project OASIS
(old Age Social and
Income Security), to
examine policies related
to old age income
security.
23 Aug. 2003
introduced new defined contribution pension
system for the govt. employees except to
defense forces.
For this an interim pension fund regulatory &
Development Authority was established.
22 Dec.
2003
The contributory
pension system
notified by the
Government of
India
1 Jan.
2004
The contributory
pension system
deemed to be
the NPS
19 Sep.
2013
PFRDA Act was
Passed.
1 Feb. 2014
PFRDA Act was
notified

6. INTRODUCTION
• The Act Extends to whole of India.
• It Includes 10 chapters and 56
sections.
Section Particulars
Sec 20 NPS
Sec 21 CRA
Sec 22 POP
Sec 23 PF
Sec 24 Restriction on foreigners
Sec 25 Prohibition of Investment in outside
India
Sec 26 Eligibility Norms

7. NATIONAL PENSION SYSTEM [Section 20]
• The contributory pension system notified by the Government of India on 22nd
December 2003, now deemed to be the NPS with effect from the 1st day of
January 2004.
Basic features of NPS
a) every subscriber shall have an individual pension account under the NPS.
b) Withdrawals, (25% of the contribution), may be permitted from the individual pension
account subject to the conditions (purpose, frequency & limits may specify by
regulations).
c) The functions of recordkeeping, accounting and switching of options by the
subscriber shall be affected by the central recordkeeping agency.
d) There shall be a choice of multiple pension funds and multiple schemes:
Provided that—
• The subscriber shall have an option of investing up to hundred per cent of his
funds in Government Securities; and
• The subscriber, seeking minimum assured returns, shall have an option to invest

8. e) There shall be portability of individual pension accounts in case of
change of employment.
f) Collection and transmission of contributions and instructions shall be
through points of presence to the central recordkeeping agency.
g) There shall not be any implicit or explicit assurance of benefits
except market-based guarantee mechanism to be purchased by the
subscriber.
h) A subscriber shall not exit from NPS except as may be specified by the
regulations.
i) At exit, the subscriber shall purchase an annuity from LIC in
accordance with the regulations.

9. CENTRAL RECORDKEEPING AGENCY [Section
21]
• The Authority shall, by granting a certificate of registration, appoint a CRA. Provided that
the Authority may, in public interest, appoint more than one CRA. Indian CRA is National
Securities Depository Limited (NSDL).
Functions of CRA
(a) Receiving instructions from subscribers through the points of presence.
(b) Transmitting such instructions to pension funds
(c) Effecting switching instructions received from subscribers.
(d) Discharging such other duties and functions.

10. All the assets and properties owned, leased or developed by the CRA, shall upon
expiry of certificate of registration or earlier revocation, Authority shall be entitled to
take over the regulated assets, either by itself or through an administrator or a
person nominated by it in this behalf.
 CRA shall be entitled to be compensated the fair value, to be ascertained by the
Authority.
 Where the earlier revocation is based on violation of the provisions of this Act or
regulations, unless otherwise determined by the Authority, the CRA shall not be
entitled to claim any compensation in respect of such regulated assets.

11. POINT OF PRESENCE [Section 22]
• The Authority may, by granting a certificate of registration, permit one or more
persons to act as a point of presence. Local Bank Branches or other Financial
Institutes are the POP.
Functions of POP
(a)Receiving contributions and instructions
(b)Transmitting them to the Trustee Bank or the CRA, as the case may be,
(c)Paying out benefits to subscribers from time to time in this regard.
• A point of presence shall function in accordance with the terms of its certificate of
registration and the regulations made under this Act.

12. PENSION FUNDS [Section 23]
• The Authority may, by granting a certificate of registration, permit one or more persons to act
as a pension fund.
Functions of PF Manager
(a) Receiving contributions
(b) Accumulating them
(c) Making payments to the subscriber.
• The number of pension funds shall be determined by regulations and the Authority may, in
public interest, vary the number of pension funds (There are 8 PF Managers in India). At least
one of them shall be a Government company.

13. • The pension fund shall function in accordance with the terms of its certificate of registration and the
regulations made under this Act.
• The pension fund shall manage the schemes in accordance with the regulations.
At present there are 8 Pension Fund Managers. they are:
 SBI Pension Fund Ltd.
 UTI Retirement Solutions Ltd
 LIC Pension Fund Ltd
 HDFC Pension Management Co. Ltd.
 ICICI Prudential Pension Fund Management Co. Ltd.
 Kotak Mahindra Pension Fund Ltd.
 Reliance Capital Pension Fund Ltd.
 Birla Sunlife Insurance Ltd.

14. Certain restrictions on foreign
companies or individual or
association of persons [Section 24]
The aggregate holding of equity shares by a foreign company
either by itself or through its subsidiary companies or its
nominees or by an individual or by an association of persons,
whether registered or not under any law of a country outside
India taken in aggregate in the pension fund shall not exceed
26% of the paid-up capital of such fund or such percentage as
may be approved for an Indian insurance company under the
provisions of the Insurance Act, 1938, whichever is higher.
Thus, it is 49%.

15. Prohibition of investment of funds of
subscribers outside India [Section 25]
• No pension fund shall, directly or indirectly invest outside India, the
funds of subscribers.
Eligibility norms of the central
recordkeeping agency, etc. [Section 26]
• The central recordkeeping agency, points of presence and pension funds, shall satisfy the
eligibility norms as may be specified by the regulations, including minimum capital
requirement, past track record including the ability to provide guaranteed returns, costs
and fees, geographical reach, customer base, information technology capability, human
resources, and such other matters.

16. Let’s Crack it
Questions from this Study note which are previously asked in
the CMA Intermediate exams
Term & Year About Question
No.
Question
Type
Mark
December
2017
Individual
Pension A/c
1 (a) (vi) MCQ 1
Withdrawal of NP
Fund
4 (b) Essay 5
June 2018 CRA 4 (b) Essay 7
June 2019 Features of NPS 4 (b) Essay 8

17. Thank you
Asst. Prof. Mohammed Shafath K M
MBA | UGC NET | CMA Inter