Why this matters now
PFRDA is tested for: PFRDA Act 2013; National Pension System (NPS) launched 1 January 2004 for central govt employees; Atal Pension Yojana (APY) launched 9 May 2015; recent Unified Pension Scheme (UPS) 24 August 2024 (implemented from 1 April 2025); the OPS-vs-NPS debate (Old Pension Scheme reverting in some states); PFRDA managed assets > Rs 12 lakh crore (FY25); composition (Chair + 3 whole-time + 3 part-time).
History
| Year | Event |
|---|---|
| 1 Jan 2004 | New Pension System (NPS) launched for new central govt recruits (later renamed National Pension System). Excluded Armed Forces. |
| 10 Oct 2003 | PFRDA constituted by executive resolution — interim regulator. |
| 2009 | NPS opened to all citizens (NPS Lite/Swavalamban for unorganised). |
| 1 Feb 2014 | PFRDA Act 2013 in force. |
| 9 May 2015 | Atal Pension Yojana (APY) launched (replaced Swavalamban). |
| 2017 | NPS Tier-2 tax benefits for govt employees. |
| 2019 | Govt contribution raised from 10% → 14% for Central govt employees. |
| 2022 | Voluntary contribution limit increased; 60% lumpsum withdrawal tax-free. |
| 24 Aug 2024 | UNIFIED PENSION SCHEME (UPS) announced — alternative to NPS for central govt employees. Hybrid model: assured 50% basic + DA family pension @ 60% of pension + minimum Rs 10,000. |
| 1 April 2025 | UPS implementation begins. |
Structure + NPS Architecture
PFRDA composition: Chairperson + 3 whole-time members + 3 part-time members = 7 total. Term 5 years; age 65 (Chair) / 62 (members).
NPS architecture (3-tier):
- Tier-I: mandatory; pension account; restricted withdrawals; tax-deductible u/s 80CCD(1B).
- Tier-II: voluntary; investment account; flexible withdrawals; no extra tax benefit.
- Subscribers’ Choice: Active Choice (subscriber picks asset mix) OR Auto Choice (life-cycle fund).
Pension Fund Managers (PFMs): SBI Pension Funds, LIC Pension Fund, UTI Retirement Solutions, HDFC Pension, ICICI Prudential Pension Fund, Birla Sun Life Pension Mgt, Kotak Pension Fund, Aditya Birla, Tata Pension Fund.
AUM + UPS Hybrid
PFRDA-regulated AUM (FY25): Rs 12.5+ lakh crore, ~1.8 crore NPS subscribers + 6.4 crore APY subscribers. Government share of NPS AUM ~60%.
Unified Pension Scheme (UPS) salient features:
- Eligibility: Central govt employees joined under NPS post-2004; option to switch from NPS.
- Assured pension: 50% of last 12-month avg basic + DA (for ≥25 yrs service); pro-rata for 10-25 yrs; minimum Rs 10,000 for 10 yrs.
- Family pension: 60% of subscriber’s pension on death.
- Funded by: Govt contribution = 18.5% of basic + DA (vs 14% under NPS).
- Lump-sum withdrawal: 10% of last drawn basic + DA per 6 months of service, in addition to assured pension.
UPSC angle
Know PFRDA — Pension Fund Regulatory and Development Authority; PFRDA ACT 2013 in force 1 Feb 2014; HQ New Delhi; CHAIRPERSON DEEPAK MOHANTY since 27 April 2023; COMPOSITION Chair + 3 whole-time + 3 part-time = 7, term 5 yrs / age 65 Chair 62 members; NPS NATIONAL PENSION SYSTEM launched 1 JAN 2004 central govt recruits (excl Armed Forces), opened all citizens 2009, NPS Lite/Swavalamban unorganised; APY ATAL PENSION YOJANA 9 MAY 2015 replaced Swavalamban; Govt contribution 10%→14% 2019; NPS 3-TIER architecture: Tier-I mandatory pension restricted-withdraw tax 80CCD(1B), Tier-II voluntary investment flexible no tax benefit, ACTIVE/AUTO CHOICE; PFMs SBI+LIC+UTI+HDFC+ICICI Pru+Birla Sun Life+Kotak+Aditya Birla+Tata; AUM FY25 Rs 12.5+ lakh cr, 1.8 cr NPS subscribers + 6.4 cr APY; UNIFIED PENSION SCHEME UPS announced 24 AUG 2024 implementation 1 APRIL 2025: HYBRID assured 50% basic+DA (≥25 yrs service) + family 60% of pension + min Rs 10000 for 10 yrs, Govt contribution 18.5% (vs 14% NPS), lump-sum 10% per 6 months service.
Frequently asked questions
When was PFRDA established?
By executive resolution on 10 October 2003; statutory under PFRDA Act 2013 (in force 1 February 2014). HQ at New Delhi.
What is the National Pension System?
A contributory pension scheme launched 1 January 2004 for central govt new recruits, later opened to all citizens 2009. Replaces the old defined-benefit pension. 3 tiers, market-linked.
What is the Unified Pension Scheme?
Announced 24 August 2024, implemented 1 April 2025. Hybrid: assured 50% basic+DA family pension to central govt employees. Optional switch from NPS.
Who is the current PFRDA Chairperson?
Deepak Mohanty — took charge 27 April 2023.