Budget 2019: Govt proposes to separate NPS Trust from PFRDA
DECCAN CHRONICLE | DC Correspondent
New Delhi: The government has proposed to separate the NPS Trust from pension regulator PFRDA in order to address issues over conflict of interest.
The Pension Fund Regulatory and Development Authority (PFRDA) implements and regulates the National Pension System (NPS) and Atal Pension Yojana through various intermediaries including, the NPS Trust.
The matter of conflict of interest arises as PFRDA is the regulator of the pension sector in India, at the same time it runs pension schemes such as NPS and APY.
"Keeping in view the wider interest of the subscribers and to maintain arm's length relationship of the NPS Trust with PFRDA, steps will be taken to separate the NPS Trust from PFRDA with appropriate organisational structure," Finance Minister Nirmala Sitharaman said in the Union Budget 2019-20 presented in Parliament Friday.
The trust was established by the PFRDA for taking care of the assets and funds under the NPS. The proposal to separate the two job roles was under consideration for last few years.
APY, mainly targeting the unorganised sector employees, offers five slabs of pension from Rs 1,000-5,000 per month upon retirement. Employees in the age bracket of 18-40 years can sign up for an APY account.
The NPS is a voluntary, defined contribution retirement savings scheme for government employees as well as for those working in the private sector.