The Rajya Sabha passed the Pension Fund Regulatory and Development Authority (PFRDA) Bill, 2011 on 6 September 2013. The Bill aims for creation of a regulator for the sector and allows at least 26 percent FDI. The Bill was passed in the Rajya Sabha with 115 votes in favour of the Bill and 25 against it. It is important to note that the Bill was passed in the Lok Sabha on 4 September 2013.
Primary features of the Pension Fund Regulatory and Development Authority (PFRDA) Bill, 2011
• After the passage of this Bill, more citizens will be entitled for pension cover. Under the national Pension Scheme, there would be around 35000 crore Rupees allocated for around 53 lakh subscribers, which include those from 26 State Governments. At present, there is merely 12 percent of active workforce in India for social security plan or pension plan.
• Every subscriber under the National Pension Scheme would have a pension account and this would be portable across all the job changes. The subscribers will have the advantage of choosing fund managers as well as schemes for managing the pension wealth.
• There will also be the income security plan optional for unorganized sector.
• The Pension Fund Regulatory and Development Authority Bill 2011 will provide the statutory powers to the Pension Fund Regulatory and Development Authority (PFRDA). PFRDA was established in August 2003 as the pension sector regulator.
• The Bill allows for 26 percent FDI in the pension funds.
• The Bill also enables the subscribers for withdrawals from the individual pension funds, but under a few conditions like the limits and the frequency.
• The Bill will help in channelising the funds in building long term assets for India, which also include the infrastructure sector.