The Pension Fund Regulatory and Development Authority (PFRDA) recently appointed an ombudsman on a contract basis in accordance with the PFRDA (Redressal of Subscriber Grievance) Regulations, 2015.
PFRDA is a statutory regulatory body established to promote old age income security, and develop and regulate the pension sector in India. As of March 31, 2023, around 63.2 million subscribers are registered under the National Pension System (NPS) or other schemes regulated/administered by PFRDA.
Unique Architecture Of NPS
NPS has a unique architecture under which various intermediaries such as pension funds, central recordkeeping agencies, trustee banks, and custodians have been leveraged for efficient and cost-effective service delivery.
Government sector nodal offices, banks and odal offices, banks, and monetary financial institutions are currently providing customer interface. The NPS subscriber base spans across all sectors and demographics covering many segments of the population, including those in the unorganised sector.
Role Of PFRDA Ombudsman
The PFRDA Ombudsman is an independent and impartial authority appointed by PFRDA to investigate and resolve complaints or grievances related to PFRDA-regulated entities.
The ombudsman has the power to summon evidence and witnesses and issue orders for the redressal of grievances. The complaints or grievances that can be filed before the PFRDA ombudsman include issues related to non-receipt of benefits, non-credit of contributions, wrong advice, mis-selling, and grievances related to services provided by PFRDA-regulated entities, such as pension funds, central record-keeping agencies, trustees, custodians, etc.
How Can PFRDA Ombudsman Help Investors?
The appointment of the PFRDA ombudsman is a significant step towards providing investors with a mechanism to seek resolution for their complaints and concerns regarding PFRDA-regulated entities.
The ombudsman has the authority to summon evidence and witnesses, and its orders are enforceable against the entities. This will enable investors to address their grievances in a timely and cost-effective manner, without the need for prolonged and expensive legal procedures.
According to experts, the appointment of the PFRDA ombudsman is a positive step towards promoting transparency, accountability, and investor protection in the pension sector. The ombudsman’s provision of a dedicated mechanism to investigate and resolve complaints related to
PFRDA-regulated entities will also help establish trust and confidence among investors, particularly those in the unorganised sector.
Moreover, the impartial and independent functioning of the ombudsman will serve as a check on the conduct of these entities, encouraging the adoption of fair and ethical practices. Experts say the appointment of the PFRDA ombudsman will support the growth and development of the pension sector in India.