pension Regulator PFRDA on Thursday allowed banks to set up pension funds for the NPS (National Pension System). This step has been taken with the aim of increasing competition and ensuring protection of customer interests. Under current rules, banks’ participation in sponsoring pension funds is limited. The pension fund is the intermediary that receives contributions from NPS members, accumulates them and makes payments as per the rules. “The Board has given in-principle approval to the framework for scheduled banks to set up independent pension funds so as to strengthen the pension environment, enhance competition and protect customer interests,” PFRDA said in a statement.
Detailed information about eligibility criteria will be issued separately for banks.
According to the statement, the new framework includes clear eligibility criteria for banks such as net assets, market cap and financial stability and safe management so that only banks with strong financial position and systemically sound banks can sponsor pension funds. PFRDA said that detailed information on eligibility criteria will be issued separately and will be applicable to both new and existing pension funds. At present, there are 10 pension funds registered with the pension regulator. Additionally, PFRDA has also revised the investment management fee structure of pension funds with effect from April 1, 2026.
Rates will be different for government and non-government sector customers
The new slab-based structure will have different rates for government and non-government sector customers and will also be applicable to schemes under the Miscellaneous Scheme Format (MSF). However, the 0.015 per cent annual regulatory fee will continue as before. The regulator said these reforms will provide customers and stakeholders access to a more competitive and robust NPS environment, thereby improving long-term retirement outcomes and old-age income security.
3 new trustees appointed to the Board of Directors of NPS Trust
Along with this, PFRDA has appointed three new trustees on the Board of Directors of NPS Trust. These include former SBI Chairman Dinesh Kumar Khara, former Executive Vice President of UTI AMC Swati Anil Kulkarni and Digital India Foundation chief Arvind Gupta. With this, Khara has also been appointed chairperson of the board of directors of NPS Trust. At present, more than 9 crore people are members of NPS and till August 31, it was managing Rs 15.5 lakh crore.
Latest Business News