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Pension Fund Regulatory and Development Authority Bill

shekhar_mittal - 9-JUN-2010

With all the interesting Parliament bills that get discussed, scrutinized and thrashed by media and people like us, there are many more which get missed out. Through the PRS site I came across "Pension Fund and Regulatory Development Authority Bill".

Before I try to explain it, here are some fun facts
  • Only 13% of the workforce is currently covered by pension schemes
  • Total government (centre+states) pension cost has increased from Rs 6,400 crore in 1991 to Rs 46,569 crore in 2001 and it is estimated that this figure will reach around 80000 crores by 2081-82
  • A number of states are already defaulting on pension payments. Employee Pension Scheme was reportedly underfunded to the extent of Rs 22,000 crore as on March 31, 2004.

Essentially, the PFRDA bill aims to address all of the above. This Bill provides a regulatory framework for a new pension system (NPS) which will be available to any individual. All the employees who joined the central government on or after 1 January 2004 already come under this new pension system.