The Pension Fund Regulatory and Development Authority (PFRDA) on June 30, 2023, issued a notification to seek public comments/feedback on proposed changes to the PFRDA (Pension Fund) Regulations, 2015.
The following key changes have been stated namely:
• Simplification of Governance norms of Pension Funds (PFs) in line with Companies Act, 2013 based on enhanced disclosures for PFs: Directors’ Responsibility Statement, CEO and CFO Certification to be part of scheme financial statements which inter-alia includes declarations in respect of following key responsibilities:
o Preparation and presentation of scheme financial statements to provide a true and correct view of scheme state of affairs and scheme NAV,
o Adequacy and effectiveness of internal financial processes and digital architecture controls,
o Compliance with PFRDA Act, PFRDA (Pension Fund) Regulations, Investment Guidelines, Valuation Guidelines, Stewardship code, voting policy, and other applicable laws,
o Adherence to the Code of Conduct and Ethics.
• Thrust on risk-based supervision.
• Segregation of roles of sponsor & PF and simplification of compliance requirements including approval of a change in management/shareholding pattern of the sponsor of PF only in specific scenarios and only intimation in remaining scenarios.
• Simplification of definitions and terms used in the Regulations such as Business Day, Compliance Officer, Key Managerial Personnel, and Sponsor.
• PFs to have additional committees of the Board such as the Audit Committee and Nomination & Remuneration Committee.
• The words “as may be specified by the Authority” used in the regulations have been proposed to be replaced with specific conditions wherever required.
The draft proposal placed in Annexure-A is open for stakeholder consultation and public comments till July 21, 2023 and can be accessed on the PFRDA website in Exposure Draft Section under Regulatory Framework Menu.
