Parliament Passes Pension Bill

Parliament passed the Pension Bill that seeks to give statutory powers to sector regulator and also allows at least 26% foreign direct investment in the sector. The Pension Fund Regulatory and Development Authority (PFRDA) Bill, 2011, was passed in the Rajya Sabha that had been already approved by the Lok Sabha on Wednesday.
The Pension Fund Regulatory and Development Authority (PFRDA) has been functioning under executive authority since it was set up in 2003.
The PFRDA runs the New Pension System, a retirement scheme for central government employees started in January 2004 that is now open to private individuals and also state governments.
The scheme is mandatory for all central government employees who joined service from January 1, 2004. It is not applicable to armed forces. The scheme no has nearly 53 lakh subscribers and a corpus of Rs.35,000 crore. 26 state governments have also joined the scheme. The Bill benchmarks FDI in the sector to that in insurance, implying 26% limit right now that could be revised to 49% if the insurance bill goes through.
The government has accepted all but one of the recommendations of the Standing Committee on Finance on the subject to get a broader support for the Bill.
The Pension Bill was first introduced in March 2005, but could not be passed by the last Lok Sabha. It was reintroduced in 2011.
The Bill allows some withdrawal from the NPS to make the scheme more attractive to subscribers. The PFRDA could later notify schemes that provide a certain minimum assured return.