The Pension Fund Regulatory and Development Authority (PFRDA) on Tuesday notified the National Pension System Trust (Second Amendment) Regulations 2023 and Pension Fund (Amendment) Regulations 2023 with amendments to NPS Trust Regulations.
The amendments to NPS Trust Regulations simplify the provisions related to the appointment of Trustees, their terms and conditions, the holding of meetings of the Board of Trustees, and the appointment of CEO – NPS Trust.
Amendments to Pension Fund Regulations simplify the provisions related to the governance of Pension Funds in line with Companies Act, 2013 and enhanced disclosure by Pension Funds.
The other notable amendments, inter alia, include the clarity of roles of Sponsor of Pension Fund & Pension Fund along with compliance to ‘fit and proper person’ criteria; Constitution of additional Board committees by Pension Funds such as Audit Committee and Nomination & Remuneration Committee; Inclusion of name ‘Pension Fund’ in name clause and requirement of existing pension fund(s) to comply with this provisions within a period of 12 months; and the annual report of schemes managed by the pension fund to include Directors’ responsibility statement.
The amendments in key areas aim at simplification and reducing compliance, the Ministry of Finance said.
These amendments are in line with the Union Budget 2023-24 announcement to review regulations to reduce the cost of compliance and enhance the ease of doing business.
It is worth highlighting that last week, PFRDA said it has brought pension funds within the ambit of the Prevention of Money Laundering Act (PMLA), tightening the oversight on these entities.
It has also introduced a concept of ‘fit and proper’ criteria for Principal Officers of both the sponsor and the pension fund, similar to SEBI’s initiative.