Govt endorses unified regulator for all pension plans

The government has given a preliminary nod to making the Pension Fund Regulatory and Development Authority (PFRDA) the sole watchdog overseeing all pension products in the country, a senior official from the agency has said.

"The in-principle approval has come from the Finance Ministry for the PFRDA Act amendment which will make PFRDA the single regulator for pension products," PFRDA's Member (Finance) Supratim Bandyopadhyay, told reporters last month, according to a report by the news agency Press Trust of India.

At present, unit linked pension plans (ULPPs) and annuities are governed by the IRDAI. The Employees’ Pension Scheme (EPS) is governed by the Employees’ Provident Fund Organisation (EPFO) and superannuation funds are managed by either employers or insurance companies, regulated by the IRDAI. Retirement funds are managed by mutual fund firms regulated by the Securities and Exchange Board of India.

Mr Bandyopadhyay said the PFRDA expects the amendment to the PFRDA Act to be passed by Parliament during the forthcoming Budget session.

Mr Sumit Shukla, CEO of HDFC Pension Fund, told LiveMint, “As far as a unified pension system is concerned, this is a necessity to avoid complexity and confusion."

Mr Amit Gopal, India business leader?—investments, at Mercer, said, “Different regulators create distortions in the market. A single regulator will give a clear vision and direction to the Indian pensions landscape."

Source: Asia Insurance Review