The Hindu Business Line : Hewitt Associates seeks a role in new pension system

SEVERAL entities have expressed interest in taking up the role of central record-keeping authority, which will be the most crucial link in the New Pension System (NPS).

Besides entities such as National Securities Depository Ltd, Central Depository Services Ltd and UTI Investor Services Ltd, Hewitt Associates, a global leader in pension administration and human resources consulting, has also evinced interest.

The Chairman, Pension Fund Regulatory and Development Authority (PFRDA), Mr D. Swarup, told Business Line that during the initial days of NPS, the PFRDA would like to have only one central record-keeping authority (CRA). "Initially, we will have only one CRA as there would not be so much load," said Mr Swarup.

CRA responsibilities: The CRA will be the hub of the new system. Besides keeping record of all pension contribution in the system, its responsibilities are expected to include reconciliation of all instructions and information received from the points of presence. Points of presence (PoP), which will collect pension subscriptions, will be the first points of interaction of subscribers in the new pension system.

According to a paper prepared by the Ministry of Finance and the India Invest Economic Foundation on the proposed pension reforms, the CRA will also be responsible for "accurately converting new contributions or transfers into units and for timely credit of these units (reconciled at prevailing net asset value obtained from the pension fund manager to relevant member accounts as also for speedy rectification of any errors."

The paper says, "The CRA will be responsible for efficient collection and timely transfer of member contributions by PoPs and pay and accounts offices, timely collection of these funds by pension fund managers and accurately crediting and reporting allocation of units into each personal retirement account."

Pension Bill: Pension reforms are set to roll out after Parliament gives its nod to the PFRDA Bill. The Bill is to be taken up during the forthcoming winter session of Parliament. There is widespread expectation that the Bill will sail through after the Standing Committee on Finance, which had scrutinised the earlier Bill, gave its go-ahead, after the amendments it suggested were incorporated.

Meanwhile, the PFRDA recently issued a set of draft regulations and sought comments from all stakeholders interested in pension reforms. The authority is currently analysing the response.

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