Extent and Application of the PFRDA Act (Section 12)

India has several overlapping retirement savings systems: the NPS, the Employees' Provident Fund, other statutory provident funds, insurance and annuity products, and the pension schemes of governments and employers. Section 12 of the PFRDA Act draws the boundaries of the Authority's jurisdiction. It says which schemes the Act governs, which it leaves to other laws, which employees are outside it, and how States and individuals may opt in.

1. Schemes to Which the Act Applies (Section 12(1) and (2))

Section 12(1) and (2), PFRDA Act, 2013

(1) This Act shall apply to (a) the National Pension System; (b) any other pension scheme not regulated by any other enactment.

(2) Every pension scheme referred to in clause (b) shall conform to the regulations made by the Authority within such time as may be specified in the regulations.

The National Pension System: the principal subject of the Act.
Other unregulated pension schemes: any pension scheme not regulated by another statute falls within the Act and must conform to PFRDA's regulations within the time the regulations specify. The clause prevents pension schemes from escaping regulation altogether.

2. Schemes and Persons Excluded (Section 12(3))

Notwithstanding sub-section (1), the Act does not apply to:

(a) Statutory provident funds: schemes or funds under the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948, the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the Seamen's Provident Fund Act, 1966, the Assam Tea Plantations Provident Fund and Pension Fund Scheme Act, 1955, and the Jammu and Kashmir Employees' Provident Funds Act, 1961.
(b) Insurance contracts: contracts referred to in Section 2(11) of the Insurance Act, 1938, that is, life insurance business, including annuities and pension products of insurers, which remain under IRDAI.
(c) Exempted schemes: any other pension scheme the Central Government exempts by notification.
(d) Pre-2004 Central employees: persons appointed before 1 January 2004 to public services of the Union, or to the All-India Services. They remain under the Old Pension Scheme.
(e) State and certain Union territory employees: persons appointed to public services of any State, or of Union territories notified by the Central Government, unless brought in under sub-section (4).

3. Extension and Opting In (Section 12(4) to (6))

States and Union territories (Section 12(4)): any State Government or administrator of a Union territory may, by notification, extend the NPS to its employees. Most States did so for employees joining after their chosen cut-off dates; States that later reverted to the Old Pension Scheme did so by changing their own policies.
Other schemes (Section 12(5)): the Central Government may, by notification, extend the Act to any other pension scheme, including one earlier exempted under Section 12(3)(c).
Voluntary joining (Section 12(6)): a person governed by any of the excluded schemes, for example an EPF member, may also join the NPS at his option. The NPS is thus available as an additional voluntary pension for those already covered elsewhere.

4. Who Is Covered in Practice

Central Government employees joining on or after 1 January 2004, except the armed forces, compulsorily; they may now opt for the Unified Pension Scheme within the NPS.
State Government employees of States that have adopted the NPS.
Employees of autonomous bodies, public sector undertakings and corporates whose employers offer the NPS.
Individual citizens aged 18 to 70 (and minors through NPS Vatsalya) who join voluntarily, including Non-Resident Indians and Overseas Citizens of India on the terms PFRDA allows.
Unorganised sector workers through the Atal Pension Yojana.

⚠ Note

The boundary between PFRDA and other regulators is functional. The EPFO administers the EPF and Employees' Pension Scheme under the EPF Act; IRDAI regulates insurers, including their pension and annuity products; and SEBI regulates mutual fund retirement schemes. Annuities bought at exit from the NPS are insurance contracts issued by life insurers.

5. Questions Arising Under Section 12

"Not regulated by any other enactment": whether an employer's pension or superannuation arrangement falls under clause (b) depends on whether another statute already regulates it. Schemes run by insurers, the EPFO or under other statutes are outside; a free-standing private pension scheme with no statutory regulator falls within PFRDA's jurisdiction.
Armed forces: the Act does not itself exclude the armed forces; they were left out of the NPS by the 2003 notification, which defines the persons for whom the system is mandatory.
Withdrawal by States: Section 12(4) empowers a State to extend the NPS by notification. When a State reverts to the Old Pension Scheme, it acts under its own service rules for its employees, but the corpus already invested in the NPS is held for individual subscribers and is governed by the Act and PFRDA's regulations, which has produced Centre-State disputes over its return.
Dual membership: Section 12(6) allows a worker to hold an EPF account and an NPS account at the same time, with the NPS serving as an additional, voluntary retirement saving.

⚠ Key point

Under Section 12(1), the Act applies to the NPS and to any other pension scheme not regulated by another enactment, which must conform to PFRDA's regulations. Under Section 12(3), it does not apply to statutory provident funds (Coal Mines, EPF, Seamen's, Assam Tea, J&K EPF), insurance contracts under Section 2(11) of the Insurance Act, exempted schemes, Central and All-India Services appointees before 1 January 2004, and State and notified Union territory employees. A State or UT may extend the NPS to its employees (Section 12(4)); the Centre may extend the Act to other schemes (Section 12(5)); and members of excluded schemes may also join the NPS (Section 12(6)).

6. Related Topics and Provisions

Object, scope and scheme
PFRDA and other financial regulators
NPS and the EPF Act