What is PFRDA (National Pension Scheme) & PRAN

Pension Fund Regulatory & Development Authority

Old age is the time when a person grows weak and cant able to work. So at that time it becomes very difficult to earn money. When there is insufficient money then to do the things become difficult. Also there are times when a lot of money is needed like the case of emergency so, to plan for such thing before hand is good. Pension is one of the sources which could help the people to fight with such situations. So government has made laws which could regulate the pension of people in a proper way and they face no problem in getting it.

Pension Fund Regulatory & Development Authority is a pension regulator and was established by Government of India on 23 august 2003. PFRDA is authorized by Ministry of Finance to promote the old age income securities by establishing, developing and regulating the pension funds. They also protect the interest of subscribers to scheme of pension funds and related matters. It is also responsible for the appointment of various intermediate agencies like central record keeping agency (CRA), Pension Fund managers, Custodian, NPS trustee Bank etc.

This authority is made up of five members out of which one is chair person and three are such that they are whole time members appointed by central government. PFRDA is the body which controls the NPS program.

NPS- it stands for national pension system which is contributing in providing people of old age with help. It helps the subscribers to make decision for their future and do systematic saving from their money in working life. It takes care that people should develop the habit of saving for their retirements. It hence tries to solve the problem of every citizen of India in providing adequate retirement income.

What happens under NPS- if a person invest in the NPS program then PFRDA regulatory professional invest that money according to the approved guidelines. The type in which they invest the money is government bonds, bills, corporate debentures and shares. All the money people invested grow and accumulate for years depending on the returns earned by investment made.

When a person is normally exiting from the NPS then he can use the accumulated money in buying the life annuity from PFRDA. They can do it be investing some part of the money they will receive on maturity.

Advantage in joining NPS

  1. Flexible- NPS has so many ranges of investment options and choice of pension fund manager so that one can easily plan the growth of their investment. People can switch from one investment option to another and also from one fund manager to another with some regulatory restrictions. The returns are totally market related.
  2. Simple- opening an account with NPS provides a PRAN (permanent retirement account number) which is a unique number allotted to an individual and remains throughout its life time.
  3. Portable- it is portable across the jobs and at all location. It is thus different from other pension plans including EPFO. It hence provides a hassle free arrangement for individual.
  4. Regulated- it is regulated by PFRDA and hence has all the transparent norms, regular monitoring and performance review by NPS trust.

What is significance of PRAN in pension funds?

It is a permanent retirement account number which is different for each individual and remains with him throughout its life. On successful registration to any pension plans there PRAN is allotted to an individual. This PRAN is along with whole kit containing PRAN card, subscriber details, an information booklet along with T-pin and I-pin to the associated office. This card on it has the information like PRAN, subscriber’s name, father’s name, photograph and signature or thumb impression. A person having the PRAN can use it any time as it is handy and can know all the things related to its account easily. It is a great step to collect all the things related to pension at one place.

This card proves that all the information is completed in CRA system. During TIER II activation a copy of this card is needed. The PRAN card is despatched to nodal office within 20 days of successful receipt of registration form at CRA-FC office. If a person doesn’t receive it then they can contact nodal office or can check the status online. Also if there is any change in the card information, it could also be done easily by visiting their office or doing it online. All the information in it should be up to date.

If a person is making use of these services then all its work becomes easy and he doesn’t have to run from one office to other for its pension work. Government have specially taken care of these things as to do all these things at that age is problematic.



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