PFRDA constitutes high-level committee to overhaul NPS payouts

New Delhi [India], January 13 : In a move to improve retirement security, the Pension Fund Regulatory and Development Authority (PFRDA) has constituted a high-level committee tasked with formulating guidelines and regulations to enable a framework for assured payouts under the National Pension System (NPS). This move aims to enhance the security of retirement income for subscribers.

The committee will be chaired by M. S. Sahoo, Founder of Dr. Sahoo Regulatory Chambers and former Chairperson of the Insolvency and Bankruptcy Board of India (IBBI).

The 15-member panel includes a diverse group of experts from various disciplines such as legal, actuarial, finance, insurance, capital markets and academia. Furthermore, to ensure comprehensive deliberation, the committee has been authorized to invite external experts or intermediaries as special invitees for feedback and consultation.

According to the Finance Ministry, the committee is established as a standing advisory committee on structured pension payouts. Its primary mandate includes creating regulations for assured payouts, ensuring a smooth end-to-end transition for subscribers moving from the accumulation phase to the decumulation (payout) phase, deliberating on novation and settlement concepts to ensure legally enforceable and market-based guarantees, and manage subscriber expectations regarding the nature of assurance and market based guarantee.

Additionally, the ministry has directed the group to design critical operational standardsincluding lock-in periods, fee structures, and withdrawal limitswhile maintaining rigorous risk and legal oversight regarding capital and solvency requirements. To protect citizens, the framework will mandate standardized disclosures to prevent mis-selling and ensure transparent management of subscriber expectations for their post-retirement years.

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