Date: 2021-04-01Category: Extra OrdinaryState: Union GovernmentCountry: India
In exercise of the powers conferred by sub section 1 of section 52 read with clauses e m n o and p of sub section 2 thereof of the Pension Fund Regulatory and Development Authority Act
## Report on the Pension Fund Regulatory and Development Authority Pension Fund Fourth Amendment Regulations, 2021
**1. Executive Summary:**
This report analyzes the Pension Fund Regulatory and Development Authority (PFRDA) Pension Fund Fourth Amendment Regulations, 2021, as published in the Gazette of India on April 1, 2021. This amendment focuses on revisions related to annual fees, investment management fees, and the inclusion of brokerage and custodian charges. Key changes include clarification on the payment schedule for annual fees, adjustment of brokerage against scheme NAV, and specification of cost of investment. These amendments are intended to provide greater clarity and potentially optimize the cost structure within the pension fund framework.
**2. Introduction:**
The purpose of this report is to provide an informative analysis of the PFRDA Pension Fund Fourth Amendment Regulations, 2021, based solely on the text of the official notification. The report aims to elucidate the key changes introduced by this amendment and its likely impact on stakeholders.
**3. Policy Overview:**
* **Amendment:** This document amends the Pension Fund Regulatory and Development Authority Pension Fund Regulations, 2015.
* **Core Objectives (Inferred):** The core objectives of these amendments, as inferred from the text, appear to be:
* To clarify the process of annual fee payment to the Authority.
* To clarify the treatment and limits of brokerage and custodian fees related to investment management.
* To ensure transparency regarding fees and costs associated with pension fund investments.
**4. Background and Rationale:**
This amendment likely addresses existing ambiguities or operational inefficiencies within the original 2015 regulations. The inclusion of specific clauses regarding annual fees and investment management fees suggests a need to streamline these processes, likely to improve the efficiency and clarity for the Pension Funds. The amendment on cost of investment aims to prevent frontend discounts on privately placed debt instruments from skewing investment cost reporting.
**5. Key Provisions / Changes:**
This section details the changes introduced by the 2021 amendment:
* **I. Regulation 13 (Annual Fee):**
* **Original Policy (Inferred):** The original regulation on annual fees was deemed insufficiently clear.
* **New Rule:** Every pension fund must deposit the annual fee with the Authority by the 10th day of the subsequent month of each quarter, or within ten days of grant of certificate of registration.
* **Effect of Change:** This change provides a stricter, clearly defined timeline for the payment of annual fees, promoting timely compliance.
* **II. Regulation 20 (Investment Management Fee):**
* **Original Policy (Inferred):** The original regulation lacked clarity on brokerage and custodian fees.
* **New Rule:** The investment management fee is exclusive of brokerage and custodian fees, including applicable taxes. Brokerage can be adjusted against the scheme NAV, up to a maximum of 0.03% inclusive of applicable taxes.
* **Effect of Change:** This change clarifies that investment management fees do not include brokerage and custodian charges and allows for a limited adjustment of brokerage against the scheme NAV, potentially reducing the overall cost burden on the fund.
* **III. Schedule III (Annual Fee Table):**
* **Original Policy (Inferred):** The original table needed more specific details on fee amount and payment timing.
* **New Rule:** The annual fee will be determined by the Authority, subject to a minimum of Rs. 10,00,000 per annum (Rs. 2,50,000 per quarter), payable quarterly by the 10th of the subsequent month, based on Assets Under Management (AUM) as of the last day of the preceding quarter.
* **Effect of Change:** This clarifies the calculation and payment schedule of the annual fee, offering greater predictability.
* **IV. Schedule VII, Paragraph IX, Subparagraph 9 (Cost of Investment):**
* **Original Policy (Inferred):** The original definition of cost of investment was potentially too broad.
* **New Rule:** The cost of investment shall only include stamp charges and brokerage along with applicable taxes. Frontend discounts on privately placed debt instruments must be excluded.
* **Effect of Change:** This change restricts the components included in the cost of investment, ensuring a more accurate representation of the actual cost and preventing distortion due to discounts on privately placed debt instruments.
* **V. Schedule VII, Paragraph IX, Subparagraph 11 (Investment Management Fee):**
* **Original Policy (Inferred):** The original regulation needed clarification on what charges are included.
* **New Rule:** The Investment Management Fee is inclusive of all transaction-related charges except brokerage and custodian charges along with applicable taxes. Fees payable to the Authority shall not be charged to the scheme.
* **Effect of Change:** This clarifies that the investment management fee covers transaction related costs, specifically excluding brokerage and custodian charges, which brings clarity to what Pension Funds pay. It also ensures that regulatory fees are not passed on to the scheme.
**6. Target Audience and Stakeholders:**
The primary target audience and stakeholders directly affected by these amendments are:
* Pension Funds operating under the PFRDA regulations.
* The Pension Fund Regulatory and Development Authority (PFRDA).
* Subscribers to the pension schemes, indirectly impacted by changes in fee structures and investment cost calculations.
**7. Implementation Aspects (Inferred):**
* **Responsible Agency:** The PFRDA is responsible for enforcing these regulations.
* **Timelines:** The amendments came into force on the date of their publication in the official gazette (April 1, 2021). Regulation 13 specifies a strict timeline for payment of annual fees (by the 10th of the subsequent month of each quarter).
* The amended rules related to Investment Management Fees are effectively immediately and require Pension Funds to adjust their internal processes to align with the new requirements.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcomes of these changes are:
* Increased clarity and transparency in the payment and calculation of fees related to pension fund management.
* Improved compliance through clearly defined timelines for fee payments.
* Standardization of investment cost calculations, leading to more accurate financial reporting.
* Potentially reduced overall cost burden on pension schemes, particularly through the allowance of brokerage adjustment against the scheme NAV.
**9. Conclusion:**
The PFRDA Pension Fund Fourth Amendment Regulations, 2021, represent a set of targeted changes designed to enhance the operational efficiency, transparency, and cost management within the pension fund framework. By clarifying aspects related to annual fees, investment management fees, and the components of investment costs, these amendments aim to provide greater certainty for pension funds and ultimately benefit pension scheme subscribers. The changes are significant in providing clear and specific rules for Pension Fund operations.
Key Entities Referenced
Pension Fund Fourth Amendment Regulations, 2021: Amendments to the Pension Fund Regulatory and Development Authority Pension Fund Regulations, 2015.
Schedule III: A schedule within the Pension Fund Regulatory and Development Authority Pension Fund Regulations specifying annual fees and other related details.
Schedule VII: A schedule within the Pension Fund Regulatory and Development Authority Pension Fund Regulations outlining investment guidelines and related provisions.
SUPRATIM BANDYOPADHYAY: Chairperson of the Pension Fund Regulatory and Development Authority.
New Delhi: The location where the notification was issued.
Pension Fund First Amendment Regulations, 2016: First amendment to the Pension Fund Regulatory and Development Authority Pension Fund Regulations.
Pension Fund Second Amendment Regulations, 2020: Second amendment to the Pension Fund Regulatory and Development Authority Pension Fund Regulations.
Pension Fund Third Amendment Regulations, 2020: Third amendment to the Pension Fund Regulatory and Development Authority Pension Fund Regulations.
Pension Fund Regulatory and Development Authority: The regulatory body responsible for pension funds in India.
Pension Fund Regulatory and Development Authority Act, 2013: The act of the Indian Parliament that established the Pension Fund Regulatory and Development Authority and provides the legal framework for regulating pension funds in India.
Pension Fund Regulatory and Development Authority Pension Fund Regulations, 2015: The principal regulations governing pension funds, as established by the Pension Fund Regulatory and Development Authority.
रजजस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-डी.ए xल xx.- GअID.- H0 x3 x0
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42021-226358
CG-DL-E-03042021-226358
xxxGIDExxx
ऄसाधारण
EXTRAORDINARY
भाग III—खण् ड 4
PART III—Section 4
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 139] नइ ददल्ली, बृहस्ट्प जतिार, ऄप्रैल 1, 2021/चत्रै 11, 1943
No. 139] NEW DELHI, THURSDAY, APRIL 1, 2021/CHAITRA 11, 1943
पिें न जनजध जिजनयामक और जिकास प्राजधकरण
ऄजधसचू ना
नइ ददल्ली, 31 माचच, 2021
पिें न जनजध जिजनयामक और जिकास प्राजधकरण (पिें न जनजध) (चौथा सिं ोधन) जिजनयम, 2021
स.ंपीएफअरडीए/12/अरजीएल/139/9.—पेंिन जनजध जिजनयामक और जिकास प्राजधकरण ऄजधजनयम, 2013
(2013 का 23) की धारा 52 की ईप-धारा (2) के ईप-खंडों (ड.), (ड), (ढ), (ण) और (त) के साथ पठनीय धारा 52 की
ईप-धारा (1) द्वारा प्रदत्त िजियों का प्रयोग करते हुए, पेंिन जनजध जिजनयामक और जिकास प्राजधकरण एतद ् द्वारा पेंिन
जनजध जिजनयामक और जिकास प्राजधकरण (पेंिन जनजध) जिजनयम, 2015 म ें संिोधन करते हुए जनम्नजलजखत जिजनयम
बनाता ह,ै नामतः
1. आन जिजनयमों का नाम ‘पेंिन जनजध जिजनयामक और जिकास प्राजधकरण (पेंिन जनजध) (चौथा संिोधन) जिजनयम,
2021’ ह ैI
2. य े िासकीय राजपत्र म ेंआनके प्रकाजित होने की तारीख स े प्रभािी होंगे I
3. पेंिन जनजध जिजनयामक और जिकास प्राजधकरण (पेंिन जनजध) जिजनयम, 2015 म ें-
(I) जिजनयम 13 को जनम्नानुसार प्रजतस्ट्थाजपत दकया जाएगा-
2007 GI/2021 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
“िार्षिक िुल्क- प्रत्येक पेंिन जनजध प्रत्येक जतमाही के ऄनुिती माह के 10 िें ददन या पंजीकरण प्रमाणपत्र प्रदान
दकए जाने स े10 ददन के ऄंदर ऄनुसूची-3 म ेंईजल्लजखत या प्राजधकरण द्वारा समय-समय पर यथा जनधाचररत
िार्षिक िुल्क जतमाही अधार पर जमा करेगी I’’
(II) जिजनयम 20 के ईप-जिजनयम (2) के पश्चात ् जनम्नजलजखत नए ईप-जिजनयम को जोड़ा जाएगा–
“(3) जनिेि प्रबंधन िुल्क, ब्रोकरेज और ऄजभरक्षक िल्ुक और ईन पर लाग ूकरों के ऄजतररि ह ैI
परन्त ुयह दक ब्रोकरेज को केिल आदिटी लेनदेन के जलए, जो दक सभी लाग ूकरों सजहत ऄजधकतम 0.03% या
जैसा दक प्राजधकरण द्वारा समय-समय पर जनधाचररत दकया जा सकता ह,ै एनएिी के जिरुद्ध समायोजजत दकया
जाएगा I
(III) ऄनसु चू ी III के भाग क के तहत ताजलका म,ें “िार्षिक िल्ु क” का ईल्लखे करन े िाली पजं ि को जनम्नानसु ार
प्रजतस्ट्थाजपत दकया जाएगा-
िार्षिक िल्ुक जैसा दक प्राजधकरण द्वारा ऄप्रजतदेय/प्रबंधन के तहत प्रत्येक जतमाही के ऄनुिती
समय-समय पर जनधाचररत अजस्ट्तयों का प्रजतित : माह के 10िें ददन या
दकया जाता ह ै या
पंजीकरण प्रमाणपत्र प्रदान
रु. 10,00,000/- प्रजतििच प्रबंधन के ऄधीन अजस्ट्तयों की दकए जाने से 10 ददन के
(रु. 2,50,000/- प्रजत राजि, जो पूिच जतमाही के ऄंजतम ऄन्दर, जतमाही अधार पर
जतमाही या ईसके भाग के ददन ह,ै को माना जाएगा I भुगतान I
जलए) जो ऄजधक हो I
(IV) ऄनसु चू ी 7 के तहत ऄनच्ु छेद IX के ईप ऄनच्ु छेद 9 को जनम्नानसु ार प्रजतस्ट्थाजपत दकया जाएगा –
“9. जनिेि लागत म ेंकेिल स्ट्टाम्प प्रभार और ब्रोकरेज, ईन पर लागू करों सजहत िाजमल होंगे I जनजी तौर पर
दकए गए ऋण जलखतों के बारे म,ें पेंिन जनजधयों के जलए अरम्भ की गइ छूट को जनिेि की लागत म ेंघटा दनेा
चाजहए I’’
(V) ऄनसु चू ी 7 के तहत ऄनच्ु छेद IX के ईप ऄनच्ु छेद 11 को जनम्नानसु ार प्रजतस्ट्थाजपत दकया जाएगा –
“11. जनिेि प्रबंधन िल्ुक, ब्रोकरेज और ऄजभरक्षक िल्ुक तथा ईन पर लाग ूकरों को छोड़कर सभी लेनदेन
सम्बन्धी िुल्क सजहत ह ैंI जनिेि प्रबंधन िुल्क की गणना पिें न जनजध द्वारा दैजनक अजस्ट्त प्रबधं न के अधार पर की
जाती ह ैI प्राजधकरण को दये िल्ुकों को योजना स ेप्रभाररत नहीं दकया जाएगा I”
सुप्रजतम बन्दोपाध्याय, ऄध्यक्ष
[जिज्ञापन -III/4/ऄसा./03/2021-22]
पाद रटप्पणी :
1. मूल जिजनयम, पेंिन जनजध जिजनयामक और जिकास प्राजधकरण (पेंिन जनजध), जिजनयम, 2015 को ऄजधसूचना
संख्या पीएफअरडीए/12/अरजीएल/139/9 के माध्यम से भारत सरकार के राजपत्र भाग-III खंड- 4 म ें 19 मइ,
2015 को प्रकाजित दकया गया I
2. पेंिन जनजध जिजनयामक और जिकास प्राजधकरण (पेंिन जनजध) (प्रथम संिोधन) जिजनयम, 2016 को ऄजधसूचना
संख्या पीएफअरडीए/12/अरजीएल/139/9 के माध्यम स े भारत सरकार के राजपत्र भाग-III खंड- 4 म ें
8 जसतंबर, 2016 को प्रकाजित दकया गया I[भाग III—खण् ड 4] भारत का राजपत्र : ऄसाधारण 3
3. पेंिन जनजध जिजनयामक और जिकास प्राजधकरण (पिें न जनजध) (दसू रा संिोधन) जिजनयम, 2020 को ऄजधसूचना
संख्या पीएफअरडीए/12/अरजीएल/139/9 के माध्यम स े भारत सरकार के राजपत्र भाग-III खंड- 4 म ें
5 फरिरी, 2020 को प्रकाजित दकया गया I
4. पेंिन जनजध जिजनयामक और जिकास प्राजधकरण (पिें न जनजध) (तीसरा संिोधन) जिजनयम, 2020 को ऄजधसूचना
संख्या पीएफअरडीए/12/अरजीएल/139/9 के माध्यम स े भारत सरकार के राजपत्र भाग-III खंड- 4 म ें
14 मइ, 2020 को प्रकाजित दकया गया I
PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
NOTIFICATION
New Delhi, the 31st March, 2021
PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY (PENSION FUND) (FOURTH
AMENDMENT) REGULATIONS, 2021
No. PFRDA/12/RGL/139/9.—In exercise of the powers conferred by sub-section (1) of section 52
read with clauses (e), (m), (n), (o) and (p) of sub-section (2) thereof of the Pension Fund Regulatory and
Development Authority Act, 2013 (23 of 2013), the Pension Fund Regulatory and Development Authority
hereby makes the following regulations to amend the Pension Fund Regulatory and Development
Authority (Pension Fund) Regulations, 2015 namely,-
1. These regulations may be called the Pension Fund Regulatory and Development Authority
(Pension Fund) (Fourth Amendment) Regulations, 2021.
2. These shall come into force on the date of their publication in the official gazette.
3. In the Pension Fund Regulatory and Development Authority (Pension Fund) Regulations,
2015:-
(I). Regulation 13 shall be substituted as below-
“Annual Fee- Every pension fund shall deposit with the Authority, by 10th day of subsequent
month of each quarter or within ten days of grant of certificate of registration, the annual fee
payable on quarterly basis, as specified in Schedule III or as may be determined by the Authority
from time to time.”
(II). In Regulation 20, the following new sub-regulation shall be added after sub-regulation (2) -
"(3) The investment management fee is exclusive of brokerage and custodian fee alongwith
applicable taxes thereon.
Provided that the brokerage shall be adjusted against scheme NAV, subject to maximum of 0.03%,
inclusive of applicable taxes or as may be determined by the Authority from time to time.
(III). In table under Part A of Schedule III, the row mentioning “Annual Fee” shall be substituted as
below-
As determined by the Non-Refundable/ % of By 10th day of
Authority from time to time, AUM: subsequent month of
subject to minimum The amount of the Assets each quarter or within
Annual Fee Rs.10,00,000/- per annum under Management shall be ten days of grant of
(Rs.2,50,000/- per quarter or considered as on last day of Certificate of
part thereof). preceding quarter. Registration, payable on
quarterly basis.4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
(IV). Sub-paragraph 9 of paragraph IX under Schedule VII, shall be substituted as below-
“9. The cost of investment shall include only the stamp charges and brokerage alongwith
applicable taxes thereon. For privately placed debt instruments, any front-end discount offered to
the pension fund shall be excluded from the cost of the investment.”
(V). Sub-paragraph 11 of paragraph IX under Schedule VII, shall be substituted as below-
“11. The Investment Management Fee is inclusive of all transaction-related charges except
brokerage and custodian charges alongwith applicable taxes thereon. The Investment Management
Fee is calculated on the daily assets managed by the pension fund. Fees payable to the Authority
shall not be charged to the scheme.”
SUPRATIM BANDYOPADHYAY, Chairperson
[ADVT-III/4/Exty./03/2021-22]
Footnote:
1. The Principal Regulations, The Pension Fund Regulatory and Development Authority (Pension
Fund) Regulations, 2015 were published in the Gazette of India on 19th May, 2015
vide No. PFRDA/12/RGL/139/9.
2. The Pension Fund Regulatory and Development Authority (Pension Fund) (First Amendment)
Regulations, 2016 were published in the Gazette of India on 8th September, 2016
vide No. PFRDA/12/RGL/139/9.
3. The Pension Fund Regulatory and Development Authority (Pension Fund) (Second Amendment)
Regulations, 2020 were published in the Gazette of India on 5th February, 2020
vide No. PFRDA/12/RGL/139/9.
4. The Pension Fund Regulatory and Development Authority (Pension Fund) (Third Amendment)
Regulations, 2020 were published in the Gazette of India on 14th May, 2020
vide No. PFRDA/12/RGL/139/9.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.