New Delhi, Nov 12: The Pension Fund Regulatory and Development Authority (PFRDA) expects to begin the process for separating NPS Trust from itself in the next financial year as roping in a consultant for the process takes time, the regulator's Chairman Supratim Bandyopadhyay said on Thursday.
In the Union Budget for 2019-20, the government had proposed to separate the NPS Trust from the pension regulator in order to address issues of conflict of interest.
"As per the directive of our board, we had floated an EoI (Expression of Interest) and we have got about 5-6 EoIs from very good consulting firms. Now, we will send RFP (Request for Proposal) to them.
"The RFP process takes time, then our board will give final approval. We have set a deadline of March 31 (2021) for a consultancy to pick-up its job. Thereafter, the separation process can start," Bandyopadhyay told PTI.
Keeping in view the wider interest of the subscribers and to maintain arm's length relationship of the NPS Trust with the PFRDA, steps will be taken to separate the NPS Trust from the authority with appropriate organisational structure, Finance Minister Nirmala Sitharaman had said in July 2019 while presenting the full budget for FY2020 post the general elections.
The trust was established by the PFRDA for taking care of the assets and funds under the NPS. The proposal to separate the two job roles has been under consideration for the last few years.
Bandyopadhyay said currently the issue is about conflict of interest besides there are a lot of overlaps also. There are certain things that both the PFRDA and the NPS Trust are doing.
"Now, we would be laying down very clearly which are the areas where they will look into exclusively and which are the areas where the PFRDA will be looking into," he added.
So far, the NPS Trust is being taken as an extended arm of the PFRDA but in effect, it is one of the intermediaries, the chairman said.
The job role of the consultancy would be to study, examine and make appropriate recommendations in the areas of organisational structure, segregation of roles and responsibilities of the NPS Trust, human resources and technological requirements.
The consultant, among others, will have to identify the specific areas for studying the inter-linkages between the PFRDA and the NPS Trust with regard to their roles and responsibilities, as per the PFRDA's EoI document for hiring a consultancy firm.