New norms for pension distribution channels: PFRDA

Pension fund regulator PFRDA has notified fresh Point of Presence (PoP) norms to deepen penetration of old age social security schemes by strengthening distribution channel for products.

POP is the first point of interaction between the subscriber and the National Pension System (NPS) architecture.

The new norms replace March 2015 regulations with regards to PoP.

The Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2018, the regulator said aim at encouraging "an independent, strong and effective distribution channel for National Pension System and other schemes".

The fresh regulations seek to ensure that market practices of the points of presence towards the provision of old age income security are fair, efficient and transparent for the promotion and protection of the interest of the subscribers, it added.

PoPs will perform duties in relation to initial customer/subscriber interaction for pension schemes and address queries of potential subscribers regarding pension schemes, among others.

"The point of presence shall be responsible for receiving and processing all subscriber requests," according to the new regulations.

Also, a PoP will be responsible for attending to the subscriber’s request for the shift from one PoP to another PoP.

The 2018 regulations stressed that a PoP will collect "no other charges" other than that specified/directed by the PFRDA.

The PFRDA also made it clear that in the event of the PoP or PoP sub-entity failing to adhere to the service level standards or any guidelines, including on timelines and loss/inconvenience to the subscriber, will be liable to compensate the subscriber.

POP perform the functions relating to registration of subscribers, undertaking Know Your Customer (KYC) verification, receiving contributions and instructions from subscribers and transmission of the same in the NPS architecture.