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PFRDA: full form, role in NPS and exam facts
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PFRDA is the Pension Fund Regulatory and Development Authority, the regulator of pension funds in India, in particular the National Pension System (NPS). It was established in 2003 as an interim body, and the PFRDA Act, 2013, which came into force on 1 February 2014, gave it statutory status. Its head office is in New Delhi.
What PFRDA does
- Regulates and develops the NPS and other pension schemes it administers, including the Atal Pension Yojana
- Registers and supervises the pension fund managers, custodians and record keepers
- Protects subscribers' interests and sets investment guidelines
- Promotes pension awareness, especially for people in the unorganised sector
The National Pension System at a glance
NPS started on 1 January 2004 for central government employees joining on or after that date (excluding the armed forces). Since 1 May 2009 it has been open to all citizens, and states followed with their own employees.
| Feature | Detail |
|---|---|
| Account number | PRAN, the Permanent Retirement Account Number |
| Tier I | The core retirement account, with restrictions on withdrawal before retirement |
| Tier II | A voluntary savings account with no lock-in |
| Pension fund managers | Licensed private and public sector firms that invest the money |
| Record keeping | Central record keeping agencies |
| Trust | The NPS Trust holds the assets |
Savers choose how their money is split between equity, corporate bonds and government securities, within PFRDA limits. Tax benefits, withdrawal limits and annuity rules are revised, so check pfrda.org.in for current terms.
Where PFRDA sits in the regulator set
The RBI regulates banks, SEBI the securities market, IRDAI insurance and PFRDA pensions. Together with the Ministry of Finance they sit on the Financial Stability and Development Council.
How bank exams ask about it
Common stems: "PFRDA regulates", "NPS was launched in", "the PFRDA Act came in", "what is PRAN" and "the head office of PFRDA". Scheme links also appear, since banks enrol people into the Atal Pension Yojana. Keep PFRDA in the regulator list in banking awareness.
Frequently asked questions
Is the NPS compulsory?
For central government employees who joined after 1 January 2004 under that scheme, it was. For others it is voluntary. Rules for newer government schemes can change, so check the latest notification.
Does PFRDA guarantee returns on NPS?
No. NPS returns depend on market performance, though the Atal Pension Yojana carries a government guarantee on the minimum pension.
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