PFRDA Guidelines for Registration of Pension Funds 2025
Effective from December 4, 2025
📄 Official Document
📋 Disclaimer: For Educational Purposes Only
This article provides general information based on PFRDA Guidelines 2025. For official and accurate information, please refer to the original documents from the Pension Fund Regulatory and Development Authority (PFRDA) website at www.pfrda.org.in. The readers are advised to consult with authorized professionals and regulatory bodies before making any decisions related to pension fund registration.
📖 Introduction
The Pension Fund Regulatory and Development Authority (PFRDA) is a statutory regulator established under the PFRDA Act, 2013. It is mandated to promote old age income security by establishing, developing, and regulating pension funds while protecting subscriber interests.
🎯 PFRDA's Mission
✓ Establish and regulate pension funds
✓ Protect interests of pension scheme subscribers
✓ Promote old age income security
✓ Monitor and supervise pension fund operations
Legal Framework
These guidelines are issued under the authority of:
- PFRDA Act, 2013
- PFRDA (Pension Fund) Regulations, 2015 and amendments
- NPS Trust Regulations
🔄 Registration Process Overview
The pension fund registration process comprises two key steps:
| Step | Process | Key Outcome |
|---|---|---|
| Step 1 | Selection and appointment of Sponsor (Applicant) | Letter of Appointment as Sponsor |
| Step 2 | Registration of Pension Fund by appointed Sponsor | Certificate of Registration for Pension Fund |
Who is a Sponsor?
Sponsor means a body corporate that proposes to hold 20% or more of paid-up equity capital in the proposed pension fund seeking registration from PFRDA.
✅ Eligibility Criteria for Pension Fund Sponsors
Prospective applicants must meet the following eligibility criteria as on the date of application:
| Criteria | Requirement |
|---|---|
| Fund Management Experience | At least 5 years in managing both equity and debt funds |
| Regulatory Status | Must be regulated by RBI, SEBI, or IRDAI in financial business |
| Net Worth | Positive net worth of at least ₹50 crore for last 5 financial years |
| Paid-up Capital | Minimum ₹25 crore on date of application |
| Profitability | Profits after tax in at least 3 of preceding 5 financial years; no cash losses in 5 years |
| Assets Under Management (AAUM) | ₹50,000 crore monthly average AAUM (individually or jointly) for last 12 months |
| Fit & Proper Person | Applicant and principal officers must qualify as 'fit & proper person' |
💡 Important Notes on Eligibility
- AAUM excludes investment of own assets, investment advisory services, and similar activities
- Joint venture applicants are eligible if one or more partners meet criteria
- Eligibility must be satisfied on the date of application submission
- Supporting documents from auditors required for verification
📝 Application Submission Process
Application Fee
Applicants must pay a non-refundable application fee of ₹10,00,000 (Rupees Ten Lakh) plus applicable taxes and levies via:
- Demand draft/banker's cheque favoring PFRDA, payable at New Delhi
- Electronic transfer to PFRDA's designated bank account
Application Structure - Three Sealed Envelopes
Applications must be submitted in three separate sealed envelopes:
| Envelope | Contents |
|---|---|
| Envelope 1: Eligibility Criteria (Pre-qualification) | ✓ Confirmation of eligibility criteria fulfillment ✓ Undertaking letter ✓ Equity shareholding details ✓ Supporting documents (with softcopy) |
| Envelope 2: Technical Parameters | ✓ Business management details ✓ Investment capabilities and track record ✓ Operations and risk management ✓ Supporting documents (with softcopy) |
| Envelope 3: Commercial Proposal | ✓ Investment management fee (IMF) proposal ✓ Slab-wise fee structure |
Submission Guidelines
- ✓ Pages must be properly numbered with table of contents
- ✓ Documents separated by section dividers
- ✓ Spiral bound presentation recommended
- ✓ No discrepancies between hard copy and soft copy (hard copy is official)
- ✓ Submitted via post, courier, or in-person
- ✗ Fax, email, or electronic modes NOT accepted
💰 Investment Management Fee (IMF) Structure
The permitted IMF slab structure as per PFRDA Guidelines 2025 is:
| Slabs of Assets Under Management (AUM) | Maximum Investment Management Fee |
|---|---|
| Upto ₹10,000 crore | 0.09% |
| Above ₹10,000 & Upto ₹50,000 crore | 0.06% |
| Above ₹50,000 & Upto ₹1,50,000 crore | 0.05% |
| Above ₹1,50,000 crore | 0.03% |
Important Points on IMF
- Calculation: Based on daily accrual basis on aggregate AUM across all schemes
- Payment: Monthly, after obtaining NPS Trust approvals
- Flexibility: Pension funds can quote lower fees within permitted range but cannot increase thereafter
- Exclusive of: Brokerage on equity transactions (maximum 0.03% including taxes and stamp duty) and custodian fees
- Borne by Pension Fund: All other transaction costs cannot be charged to schemes
📊 Commercial Proposal Requirements
Applicants must submit IMF rates for each AUM slab as per the permissible structure. The minimum fee cap is 0.03% for each slab.
🔍 Application Evaluation Process
Stage 1: Completeness Check
PFRDA verifies that all required information is submitted in specified format. Authority may request fresh documents if format is non-compliant.
Stage 2: Eligibility Screening
Applications are shortlisted based on eligibility criteria. Non-compliant or disqualifying applications are summarily rejected.
Stage 3: Technical Parameter Evaluation
Scoring of technical parameters with maximum 100 marks across:
- Business Management (25 marks): Management quality, experience, financial strength, corporate governance
- Investment Capabilities (25 marks): Investment policy, research capability, portfolio operations, team quality
- Investment Track Record (25 marks): Performance in equities and fixed income, tracking error, NPA details
- Operational Due Diligence (15 marks): Risk management, back-office processes
- Business Plan (10 marks): Proposed pension business strategy
⚠️ Minimum Cut-off Score
Minimum 70 marks required in Technical Parameter evaluation to proceed to Commercial Proposal evaluation stage.
Stage 4: Commercial Proposal Evaluation
Technically qualified applicants (70+ marks) have their Commercial Proposals evaluated. IMF proposals within permissible limits are accepted; those exceeding limits are rejected.
Stage 5: Final Selection
Applicants meeting all criteria are appointed as sponsors of pension funds, eligible to manage pension schemes regulated by PFRDA (excluding APY and default schemes for government employees).
🏛️ Pension Fund Registration Steps
After Sponsor Appointment
- Acknowledgement: Sponsor acknowledges appointment letter and confirms readiness
- Incorporation: Pension fund incorporated per PFRDA Regulations after obtaining sectoral regulator approvals
- Documentation: Sponsor submits:
- Certificate of Incorporation
- Memorandum and Articles of Association
- Shareholder details and holdings
- Auditor's Net worth certificate
- Board of Directors and key personnel details
- Registration Fee: Non-refundable registration fee deposited as per Regulations
- Application for Certificate: Sponsor applies for Certificate of Registration
- Certificate Granted: PFRDA grants Certificate of Registration after evaluation
Commencement of Business
- Pension fund must commence operations within 6 months of registration certificate grant
- Extension of up to 6 additional months permitted for valid reasons
- Annual fee must be deposited as per Regulations
- Physical inspection conducted by PFRDA to verify readiness
- "Certificate for Commencement of Business" issued after successful inspection
📋 Technical Parameters Details
Business Management Requirements
- Applicant/sponsor company profile and history (max 5 pages)
- Business plan for proposed pension business (max 3 pages)
- Corporate governance policy documentation
- Senior management team details and qualifications
- Assets under management classification by asset class
- 5-year profit and net worth statements
Investment Capabilities (Equity & Fixed Income)
- Investment policy document and decision-making process flow
- Sources of information and in-house research details
- Portfolio operations management, trading systems, and controls
- Business continuity and disaster recovery procedures
- Investment and trading professionals' details and credentials
- Organizational reporting lines for investment team
Investment Track Record
- Performance track record for all managed vehicles/mandates (60-month history)
- Benchmark and mandate restrictions details
- Passive fund management process and tracking error range
- Non-performing assets (NPA) percentage for last 5 years
Operations and Risk Management
- Risk management policy and reporting structure
- Operating structure and reporting lines
- IT platforms, MIS systems, and BCP/DRP mechanisms
- Third-party relationships and outsourced services
- Compliance, legal, and human resource policies
❌ Disqualification and Rejection Grounds
PFRDA may disqualify or reject any applicant if:
- ✗ Application is incomplete, conditional, or based on incorrect/false information
- ✗ Material facts are omitted from disclosure
- ✗ Requisite application fee not submitted
- ✗ Applicant or principal officers not "fit & proper person" as per PFRDA Regulations
- ✗ Application non-conformity with guidelines or regulations
- ✗ Failure to submit information within given timelines
⚠️ Important Legal Point
Submission of application presumes the applicant has fully ascertained its eligibility and that no statutory/regulatory prohibition exists. PFRDA reserves the right to reject applications at any stage without assigning reasons or liability.
⚖️ Governing Laws and Jurisdiction
All matters related to pension fund registration are governed by:
- PFRDA Act, 2013 and rules notified thereunder
- PFRDA (Pension Fund) Regulations, 2015 and amendments
- PFRDA Directions, Guidelines, Notifications, and Circulars
- Applicable laws, rules, and regulations of Union of India
📍 Jurisdiction
Only Courts at New Delhi (excluding all other courts) have jurisdiction to decide or adjudicate on any matter or dispute related to pension fund selection, registration, or procedure thereof.
⏰ Important Timelines
| Activity | Timeline |
|---|---|
| Commencement of Business from Registration Certificate | Within 6 months (extendable by 6 months for valid reasons) |
| Application Information Submission | As per Authority's schedule and timelines |
| Further Information Requests Response | Within stipulated timeframe (subject to Authority's discretion) |
| Registration Certificate Validity | Valid unless suspended/cancelled by Authority per Regulations |
📌 Key Takeaways
Summary of PFRDA Guidelines 2025
- Two-Step Process: Sponsor selection followed by pension fund registration
- Rigorous Eligibility: 5-year fund management experience, ₹50 crore net worth, ₹50,000 crore AAUM required
- Application Fee: ₹10 lakh non-refundable, in sealed envelopes with comprehensive documentation
- Evaluation Criteria: Eligibility (100%), Technical (100 marks, 70+ required), Commercial (IMF slab compliance)
- IMF Structure: Tiered from 0.09% (up to ₹10k Cr) to 0.03% (above ₹1.5L Cr)
- Operational Start: Within 6 months of registration certificate, extendable by 6 months
- Regulatory Compliance: Adherence to PFRDA Act, Regulations, and applicable laws mandatory
📚 For More Information
Interested applicants and pension fund sponsors should carefully review the complete PFRDA Act 2013, PFRDA (Pension Fund) Regulations 2015, and all amendments available on the official PFRDA website.
Official Guidelines Effective Date: December 4, 2025
Regulatory Authority: Pension Fund Regulatory and Development Authority (PFRDA)
Website: www.pfrda.org.in
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