Registration of Pension Funds Guidelines, 2026 – Pension Fund Regulatory and Development Authority
1.1 PFRDA is a statutory
regulator, established through an Act of Parliament being the “Pension
Fund Regulatory and Development Authority Act, 2013” notified w.e.t.
01.02.2014. PFRDA is mandated to promote old age income security by establishing,
developing and regulating pension funds, to protect the interest of the
subscribers to the schemes of pensions funds and for matters connected
therewith or incidental thereto.
1.2 Section 27(1) of the PFRDA Act states that ‘No intermediary,
including a pension fund or a point of presence to the extent regulated under
this Act, shall commence any activity relating to a pension fund except under
and in accordance with the conditions of a certificate of registration granted
by the Authority in accordance with the provisions of this Act and the
regulations’
1.3 Further, section 23(1) of the PFRDA Act 2013 states that
“The Authority may, by granting a certificate of registration under sub-section
(3) of section 27, permit one or more persons to act as a pension fund for the
purpose of receiving contributions, accumulating them and making payments to
the subscriber in such manner as may be specified by regulations”.
1.4 The framework for registration, functions, duties,
responsibilities, obligations, monitoring, Supervision, governance and internal
control for pension fund has been laid down by the Authority through
notification of the PFRDA (Pension Fund) Regulations, 2015 and amendments
thereto.
1.5 These guidelines shall be construed to be in addition to the
provisions of the PFRDA Act, 2013 and the rules and regulations notified
thereunder and is issued interalia with an objective to lay down the process
and procedure of granting registration to a pension fund by the Authority. The
said process comprises of 02 steps; (i) selection/appointment of sponsor
(applicant) of pension fund and (ii) registration of pension fund established
by the sponsor (applicant).
1.6 Interested applicant(s) desirous of establishing and
registering an entity as pension fund with the Authority may make an
application for consideration of the Authority to be selected/appointed as a
‘sponsor of pension fund’. Thereafter, the selected/appointed sponsor may seek
registration from the Authority for the pension fund established by it.
1.7 The registration granted by the Authority shall remain valid
unless suspended or cancelled by the Authority in accordance with the PFRDA
(Pension Fund) Regulations.
1.8 The choice of pension fund(s) for managing the funds/assets
rests with the subscriber and these guidelines do not bestow any right on the
pension fund(s) to get allocation of funds contributed by subscribers/
employers.
2. PROCEDURE FOR
PENSION FUND REGISTRATION
Registration of a pension fund by the Authority shall
be a two-step process wherein in the first step the eligible sponsor(s) makes
an application for its selection/appointment as sponsor of pension fund and
upon the sponsor(s) being found suitable to act as such, in the second step the
selected/appointed sponsor(s) makes an application for grant of a Certificate
of Registration to the pension fund incorporated by the sponsor(s).
3. SPONSOR
(APPLICANT)
“Sponsor” means a body corporate who proposes to hold
20% or more of paid-up equity capital in the pension fund (to be established)
for which registration is being sought from the Authority by the applicant.
4. FUNCTIONS AND
OBLIGATIONS OF SPONSOR (APPLICANT)
The functions, duties, obligations and responsibilities
of the sponsor of a pension fund is detailed under PFRDA (Pension Fund)
Regulations.
5. APPLICATION
FEE
The application shall be accompanied with a
non-refundable application fee of Rs.10,00,000 (Rupees Ten Lakh only) along
with applicable taxes and levies in the form of a demand draft/banker’s cheque
drawn in favor of Pension Fund Regulatory and Development Authority payable at
New Delhi or proof of payments through electronic transfers to the designated
Bank account of PFRDA.
6. ELIGIBILITY
CRITERIA (PRE-QUALIFICATION)
The prospective applicants are requested to check the
eligibility and other operative framework as provided in Pension Fund
Regulations 2015 and amended from time to time. The sponsors and the pension
funds have to ensure their compliance with the provisions of PF Regulations,
NPST Trust Regulations and the provisions of PFRDA Act 2013.
6.1 An applicant shall satisfy (on the date of
application) the following eligibility criteria to act as a sponsor of pension
fund;
(a) as specified in the PFRDA (Pension Fund)
Regulations and amendments thereto.
(b) additional terms and conditions as stated in these
guidelines.
6.2 Applicant(s) with joint venture status can also
apply provided one or more of the joint venture partner(s) fulfill the eligibility
criteria to act as a Sponsor of pension fund.
6.3 The eligibility criteria interalia that should be
fulfilled by the applicant(s) as on the date of application, for consideration
of its application, are summarized hereunder:-
|
ELIGIBILITY
CRITERIA (PRE-QUALIFICATION) |
|
|
1. |
shall have experience of fund management (equity
and debt) of at least 05 years |
|
2. |
shall be an entity engaged in financial business
activity and regulated by RBI or SEBI or IRDAI |
|
3. |
shall have a positive net worth of at least Rs
50 crore for the last 05 preceding financial years and paid-up capital of at
least Rs 25 crore on the date of application |
|
4. |
shall have profits after tax in at least 03 of
the preceding 05 financial years with no cash losses during this period of 05
financial years |
|
5. |
(a) Monthly Average Assets under Management
(AAUM) of Sponsor(s), individually or jointly, must not be less than
Rs.50,000.00 crores for the last 12 months ending the preceding month of
application till the sponsored Pension Fund meets this criterion on its own. Provided
that Clause (5) relating to own investment shall not apply where the
Sponsor(s) of a Pension Fund is/are a Scheduled Commercial Bank having a
market capitalization of not less than ₹1,00,000 crore and a total asset base
of not less than ₹5,00,000 crore, and complying with the regulatory
requirements relating to net worth and the Capital to Risk-Weighted Assets
Ratio, as stipulated by the Reserve Bank of India. Further, such Scheduled
Commercial Bank shall satisfy the following conditions, based on the
published annual report(s) for the most recent financial years, as required
to be published under applicable law: (a)
the bank has declared profits in each of the immediately preceding three
financial years; and (b)
the bank has net non-performing assets not exceeding 4% of net advances. |
7. DISQUALIFICATION
/ REJECTION
The Authority may disqualify/reject any
applicant/application if:-
(a) the application received is incomplete,
conditional or is based on incorrect/false information or omits to disclose
material facts.
(b) the application is not accompanied with the requisite
fees.
(c) the applicant and its principal officer(s) is not
a ‘fit & proper person’ as specified in Schedule — II of the PFRDA
(Pension Fund) Regulations.
(d) the application does not conform to these
guidelines or regulations.
(e) the applicant fails to submit relevant information
within the given timelines, which in the opinion of the Authority is required
for evaluation of the application.
****
Comments