Pension Fund Regulatory And Development Act 2013
Question 1.National Pension System
Answer:
National Pension System means the contributory pension system referred to in Section 20 whereby contributions from a subscriber are collected and accumulated in an individual pension account using a system of points of presence, a central record-keeping agency, and pension funds as may be specified by regulations;
Question 2.National Pension System Trust
Answer:
National Pension System Trust means the Board of Trustees who hold the assets of subscribers for their benefit;
Question 3.Pension Fund
Answer:
A pension fund means an intermediary that has been granted a certificate of registration under sub-section (3) of Section 27 by the Authority as a pension fund for receiving contributions, accumulating them, and making payments to the subscriber in the manner, as may be specified by regulations;
Question 4. Point of presence
Answer:
Point of presence” means an intermediary registered with the Authority under sub-section (3) of Section 27 as a point of presence and capable of electronic connectivity with the central record-keeping agency to receive and transmit funds and instructions and payout of funds;
Question 5.Document
Answer:
The document shall include any matter written, expressed, or described upon any substance using letters, figures, or marks, or by more than one of those means, in printed or in electronic version, which is intended to be used, or which may be used, by the Interim Pension Fund Regulatory and Development Authority, or Authority or an intermediary or any other entity connected with the National Pension System, to record that matter;
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Question 6.Individual pension Account
Answer:
Individual pension account means an account of a subscriber, executed by a contract setting out the terms and conditions under the National Pension System;
Question 7.Intermediary
Answer:
Intermediary include pension funds, central record-keeping agencies, National Pension System Trust, pension fund advisers, retirement advisers, point of presence, and such other persons or entities connected with the collection, management, record keeping, and distribution of accumulations;
Question 8. Central Record-Keeping Agency
Answer:
A central record-keeping agency is an agency registered under Section 27 to perform the functions of record-keeping, accounting, administration, and customer service for subscribers to schemes;
Question 9. Regulated Assets
Answer:
Regulated assets means the assets and properties, both tangible and intangible, owned, leased, or developed by and other rights belonging to, the central record-keeping agency;
Question 10.Securities Appellate Tribunal
Answer:
Securities Appellate Tribunal means a Securities Appellate Tribuna established under sub-section (1) of Section 15-K of the Securities and Exchange Board of India Act, 1992
Pension Fund Regulatory And Development Act 2013 Short Note Question And Answers
Question 1. Write short notes on the Central Recording Keeping Agency.
Answer:
Central Recordkeeping Agency:
- The Authority shall, by granting a certificate of registration under sub-section (3) of Section 27, appoint a central record-keeping agency: Provided that the Authority may, in the public interest, appoint more than one central record-keeping agency.
- The central record-keeping agency shall be responsible for receiving instructions from subscribers through the points of presence, transmitting such instructions to pension funds, effecting switching instructions received from subscribers, and discharging such other duties and functions, as may be assigned to it under the certificate of registration or as may be determined by regulations.
- All the assets and properties owned, leased, or developed by the central record-keeping agency, shall constitute regulated assets and upon expiry of the certificate of registration or earlier revocation thereof, the Authority shall be entitled to appropriate and take over the regulated assets, either by itself or through an administrator or a person nominated by it in this behalf:
- Provided that the central record-keeping agency shall be entitled to be compensated the fair value, to be ascertained by the Authority, of such regulated assets as may be determined by regulations:
- Provided further that where the earlier revocation of the certificate of registration is based on violation of the conditions in the certificate of registration or the provisions of this Act or regulations, unless otherwise determined by the Authority, the central record-keeping agency shall not be entitled to claim any compensation in respect of such regulated assets.
Question 2. Write short notes on Point of Presence.
Answer:
Point of presence:
- 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 point of presence to receive contributions and instructions, transmitting them to the Trustee Bank or the central record-keeping agency, as the case may be, and pay out benefits to subscribers in. accordance with the regulations made by the Authority from time to time in this regard.
- A point of presence shall function by the terms of its certificate of registration and the regulations made under this Act.
Question 3. Write short notes on the Pension Fund.
Answer:
Pension funds:
- 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 to receive contributions, accumulate them, and make payments to the subscriber in such manner as may be specified by regulations.
- The number of pension funds shall be determined by regulations and the Authority may, in the public interest, vary the number of pension funds: Provided that at least one of the pension funds shall be a Government company.
- The pension fund shall function by the terms of its certificate of registration and the regulations made under this Act.
- The pension fund shall manage the schemes according to the regulations.
Pension Fund Regulatory And Development Act 2013 Descriptive Question And Answers
Question 1. What are the basic features of the national pension system as contained in the Pension Fund Regulatory and Development Authority Act, 2013?
Answer:
The National Pension System shall have the following basic features, namely:
- every subscriber shall have an individual pension account under the National Pension System
- withdrawals, not exceeding twenty-five percent of the contribution made by the subscriber, may be permitted from the individual pension account subject to the conditions, such as purpose, frequency, and limits, as may be specified by the regulations
- The functions of record keeping, accounting, and switching of options by the subscriber shall be effected by the central record-keeping agency
- there shall be a choice of multiple pension funds and multiple schemes.
Provided that
- the subscriber shall have an option of investing up to a hundred percent of his funds in Government Securities; and
- the subscriber, seeking minimum assured returns, shall have the option to invest his funds in such schemes providing minimum assured returns as may be notified by the Authority
- there shall be the portability of individual pension accounts in case of a change of employment
- collection and transmission of contributions and instructions shall be through points of presence to the central record-keeping agency
- there shall not be any implicit or explicit assurance of benefits except a market-based guarantee mechanism to be purchased by the subscriber
- a subscriber shall not exit from the National Pension System except as may be specified by the regulations; and
- at exit, the subscriber shall purchase an annuity from a life insurance company according to the regulations.
Question 2. Discuss the different provisions relating to pension funds as per section 23 of the PFRDA Act, 2013
Answer:
The following provisions relating to pension funds have been laid down in Section 23 of the PFRDA Act, 2013:
- 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 to receive contributions, accumulate them, and make payments to the subscriber in such manner as may be specified by regulations.
- The number of pension funds shall be determined by regulations and the Authority may, in the public interest, vary the number of pension funds: Provided that at least one of the pension funds shall be a Government company. Here, for this sub-section, the expression “Government Company” shall have the meaning assigned.
- The pension fund shall function by the terms of its certificate of registration and the regulations made under this Act.
- The pension fund shall manage the schemes according to the regulations.
Question 3. Explain the Provision of the National Pension System.
Answer:
National Pension System [Section 20]
- The contributory pension system notified by the Government of India in the Ministry of Finance vide notification number F. No. 5-7-2003 ECB And PR, dated the 22nd December 2003, shall be deemed to be the National Pension System with effect from the 1st day of January 2004, and such National Pension System may be amended from time to time by regulations.
- Notwithstanding anything contained in the said notification, the National Pension System shall, on the commencement of this Act, have the following basic features, namely:
- every subscriber shall have an individual pension account under the National Pension System;
- withdrawals, not exceeding twenty-five percent of the contribution made by the subscriber, may be permitted from the individual pension account subject to the conditions, such as purpose, frequency, and limits, as may be specified by the regulations;
- the functions of record keeping, accounting, and switching of options by the subscriber shall be effected by the central record keeping agency;
- there shall be a choice of multiple pension funds and multiple schemes Provided that
- the subscriber shall have an option of investing up to a hundred percent of his funds in Government Securities; and
- the subscriber, seeking minimum assured returns, shall have the option to invest his funds in such schemes providing minimum assured returns as may be notified by the Authority.
- There shall be portability of individual pension accounts in case of a change of employment.
- collection and transmission of contributions and instructions shall be through points of presence to the central record-keeping agency;
- there shall not be any implicit or explicit assurance of benefits except a market-based guarantee mechanism to be purchased by the subscriber;
- a subscriber shall not exit from the National Pension System except as may be specified by the regulations; and
- at exit, the subscriber shall purchase an annuity from a life insurance company according to the regulations.
- In addition to the individual pension account mentioned in Clause (1) of sub-section (2), a subscriber may also, at his option, have an additional account under the National Pension System having the features mentioned in Clauses (3) to (5) of sub-section (2) and also have the additional feature that the subscriber shall be free to withdraw part or all of his money at any time from the additional account.
Question 4. What are the eligibility norms of the central record-keeping agency?
Answer:
Eligibility norms of the central record-keeping agency:
The central record-keeping agency, points of presence, and pension funds shall satisfy the eligibility norms as may be specified by the regulations, including minimum capital requirement, past track- record including the ability to provide guaranteed returns, costs and fees, geographical reach, customer base, information technology capability, human resources, and such other matters.