PFRDA Functions: All About Pension Fund Regulation in India

The Pension Fund Regulatory and Development Authority (PFRDA) is the statutory body of the Government of India responsible for regulating and supervising the country’s pension sector. It was created with a clear aim to provide old-age financial security and ensure that every Indian can plan for retirement confidently. PFRDA oversees major pension schemes such as the National Pension System (NPS) and Atal Pension Yojana (APY), sets rules for pension fund operations, safeguards subscriber interests and promotes wider pension coverage across the country. In this article, we will explain the PFRDA Act 2013, the key functions of PFRDA, the intermediaries it regulates (like Pension Fund Managers, CRAs, and Points of Presence), the online services available, and practical insights that help investors make informed decisions. The content is written in simple Indian English and uses verified information from official PFRDA and NPS sources for complete reliability.

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PFRDA Act 2013

The PFRDA Act, 2013 is the law that officially grants statutory powers to the Pension Fund Regulatory and Development Authority. Before this Act, PFRDA operated mainly as an advisory body. After the Act was passed by Parliament on 18 September 2013 and later notified in 2014, it became a full-fledged regulator with legal authority to supervise India’s pension sector.

The primary objective of the Act is to “promote old-age income security by establishing, developing and regulating pension funds, and protecting subscribers’ interests.” It lays down the complete framework for how pension schemes like the National Pension System (NPS) and other similar retirement products must operate.

Under the PFRDA Act, the Authority is empowered to:

• register and regulate pension intermediaries such as Pension Fund Managers, CRAs, PoPs, Custodians and Trustee Banks

• ensure the safety and proper management of subscriber contributions

• create transparent governance and disclosure standards

• set investment guidelines

• resolve disputes and strengthen subscriber protection

• promote wider pension coverage across India

Overall, the Act acts as the backbone of India’s modern pension ecosystem, ensuring that every subscriber’s retirement savings are managed responsibly, securely and in a fully regulated manner.

Functions of PFRDA

The Pension Fund Regulatory and Development Authority performs several core functions that ensure India’s pension system operates in a safe, transparent and well-governed manner. Each function directly supports the goal of helping citizens build reliable retirement savings.

1. Regulates the National Pension System and other pension schemes

PFRDA frames rules, guidelines and operational standards for the National Pension System (NPS) and related pension schemes. This includes setting regulations for fund structure, contributions, withdrawals, investments and service delivery. This ensures that every scheme follows a common, transparent, and legally sound framework.

2. Registers and supervises intermediaries

PFRDA authorises and regulates all key entities involved in managing pension money, such as:

• Central Recordkeeping Agencies (CRAs)

• Pension Fund Managers (PFMs)

• Trustee Banks

• Custodians

• Points of Presence (PoPs)

It monitors their performance, service quality and compliance to ensure smooth and secure pension operations.

3. Protects subscriber interest

One of the Authority’s most important roles is safeguarding the interests of NPS and APY subscribers. PFRDA ensures that pension funds follow strict rules, maintain transparency and handle investor money responsibly. It also ensures fair practices, timely reporting and clear communication to subscribers.

4. Sets investment and governance norms

To ensure proper risk management, PFRDA defines detailed investment guidelines, limits, asset allocation rules and governance practices that Pension Fund Managers must follow. These norms help maintain stability, reduce risk, and ensure long-term protection of retirement savings.

5. Promotes pension awareness and inclusion

PFRDA actively works to expand pension coverage across India. It conducts awareness programmes, investor education campaigns and promotions for schemes like NPS and APY especially in sectors where pension participation is low. This helps more citizens understand the importance of retirement planning.

6. Provides a structured grievance redressal mechanism

The Authority has established a multi-level grievance system through CRA portals, NPS Trust and direct escalation channels. Subscribers can raise complaints online, track status, and receive timely resolutions, ensuring accountability at every stage.

7. Ensures transparency and compliance

PFRDA regularly reviews performance data, publishes reports, and ensures that all intermediaries meet regulatory and disclosure requirements. This includes monitoring returns, investment patterns, audit reports and operational compliance across the pension ecosystem.

Intermediaries Under PFRDA

Intermediaries play a crucial role in executing PFRDA’s mission. These registered participants facilitate pension account opening, investment, and management:​

• Central Recordkeeping Agency (CRA): Maintains records, assigns PRAN, and manages customer service

• Pension Fund Managers (PFM): Invest and grow subscriber funds following regulatory guidelines

• Points of Presence (PoPs): Banks and agencies that help with NPS enrollments and services

• Trustee Banks: Handle fund flows and settlements

• Annuity Service Providers (ASPs): Provide pension payouts on subscribers’ retirement

• Retirement Advisors: Offer pension advice and education to individuals

Each intermediary is registered and regularly monitored by PFRDA for compliance and service quality

Central Record Keeping Agency (CRA)

The Central Record Keeping Agency (CRA) is the operational backbone of the National Pension System (NPS). It manages all core recordkeeping, data security and account-related processes for subscribers across India. Every NPS investor whether salaried, self-employed or government employee interacts with the CRA throughout their pension journey.

A CRA is responsible for the following key functions:

1. Maintaining complete subscriber records

The CRA handles all recordkeeping, accounting and data administration for NPS accounts. It ensures every transaction contribution, switch, withdrawal, nominee update is accurately captured and maintained.

2. Issuing PRAN (Permanent Retirement Account Number)

Each subscriber receives a unique PRAN, and this number is generated and managed by the CRA. PRAN acts as your lifelong pension account number under NPS.

3. Providing statements and transaction history

CRAs offer annual and regular account statements, real-time transaction history, contribution updates and downloadable reports through their online portals and mobile apps.

4. Enabling online updates and service requests

Subscribers can make several changes through CRA portals, such as:

• updating mobile number, email ID or address

• changing nomination

• modifying scheme preference or Pension Fund Manager

• submitting partial withdrawal requests

• tracking service requests and ticket status

This ensures a seamless digital experience.

5. Ensuring strong IT systems and data security

CRAs operate robust IT platforms that safeguard subscriber information with strict security, encryption and data protection standards. This supports transparency and uninterrupted service.

6. Handling grievance redressal

CRAs are also responsible for managing the first level of grievance resolution. Subscribers can raise issues directly through the CRA portal, call centres or mobile apps and receive structured responses.

Online Services of PFRDA

To make pension management easy and digital, PFRDA provides several online services:​

• Opening of NPS accounts fully online

• E-contribution to PRAN account (except APY and NPS Swavalamban)

• Online modifications of details and investment strategies

• Downloading and viewing statements

• Easy withdrawal and exit requests

• Online grievance redressal

• E-PRAN card generation

These digital tools help subscribers manage their pensions quickly and securely, even from their smartphones

Why CRAs are important

Thanks to the CRA system, every NPS account is managed transparently, accurately and securely. Subscribers can access their account anytime online, monitor investments, and make changes with complete ease ensuring a smooth experience throughout their retirement planning journey.

Conclusion

The Pension Fund Regulatory and Development Authority (PFRDA) plays a central role in shaping India’s modern pension ecosystem. By creating a clear regulatory framework, supervising intermediaries like Pension Fund Managers, CRAs and PoPs, and enabling seamless digital services, PFRDA ensures that every Indian can access transparent, secure and hassle-free retirement planning. For NPS subscribers, the smartest approach is to understand the basic rules, use official eNPS and CRA platforms, compare Pension Fund Managers based on long-term performance and charges, and review your investment allocation from time to time. With the right guidance and tools such as Motilal Oswal’s research insights and expert support, planning for old age becomes simpler, safer and more efficient for everyone.