Key Definitions Under the PFRDA Act (Section 2)

The PFRDA Act creates a system with several distinct actors: the Authority, the subscriber, the pension funds that invest money, the recordkeeping agency that keeps accounts, the points of presence where people join, the trust that holds the assets, and the bank that moves the money. Section 2 defines these terms. Understanding the definitions is essential, because the Act's duties, powers and penalties attach to the entities they describe.

1. The System and the Subscriber

• National Pension System (Section 2(1)(i)): the contributory pension system referred to in Section 20, "whereby contributions from a subscriber are collected and accumulated in an individual pension account using a system of points of presence, a central recordkeeping agency and pension funds as may be specified by regulations".
• Subscriber (Section 2(1)(t)): "includes a person who subscribes to a scheme of a pension fund". The inclusive wording covers government employees, corporate employees, individual citizens and others.
• Individual pension account (Section 2(1)(e)): an account of a subscriber, "executed by a contract setting out the terms and conditions under the National Pension System". The account is identified by a Permanent Retirement Account Number (PRAN).
• Scheme (Section 2(1)(r)): a scheme of a pension fund approved by the Authority under the Act.

2. The Intermediaries

• Pension fund (Section 2(1)(l)): an intermediary granted a certificate of registration under Section 27(3) as a pension fund, for receiving contributions, accumulating them and making payments to the subscriber as specified by regulations.
• Central recordkeeping agency (Section 2(1)(b)): an agency registered under Section 27 to perform recordkeeping, accounting, administration and customer service for subscribers.
• Point of presence (Section 2(1)(n)): an intermediary registered under Section 27(3) and capable of electronic connectivity with the central recordkeeping agency, for receiving and transmitting funds and instructions and paying out funds; in practice, banks, post offices and others where subscribers enrol.
• National Pension System Trust (Section 2(1)(j)): the Board of Trustees who hold the assets of subscribers for their benefit.
• Trustee Bank (Section 2(1)(v)): a banking company as defined in the Banking Regulation Act, 1949; it manages the flow of funds between the system's participants.
• Others: pension fund advisers, retirement advisers and "such other person or entity" connected with collection, management, recordkeeping and distribution, such as custodians and annuity service providers.

3. The Authority and Its Funds

• Authority (Section 2(1)(a)): the Pension Fund Regulatory and Development Authority established under Section 3(1).
• Chairperson and member (Section 2(1)(c) and (h)): "member" includes the Chairperson.
• Interim PFRDA (Section 2(1)(f)): the interim Authority set up by resolutions of 10 October 2003 and 14 November 2008.
• Pension Regulatory and Development Fund (Section 2(1)(m)): the fund constituted under Section 40, into which the Authority's receipts are credited.
• Subscriber Education and Protection Fund (Section 2(1)(u)): the fund constituted under Section 41, which receives penalties and is used for subscriber education and protection.

4. Other Definitions

• Document (Section 2(1)(d)): any matter recorded on any substance in letters, figures or marks, in printed or electronic form, intended or usable by the Authority, the Interim Authority, an intermediary or any entity connected with the NPS for recording that matter. The wide definition supports the powers of investigation and search and seizure.
• Regulated assets (Section 2(1)(p)): the tangible and intangible assets owned, leased or developed by, and other rights belonging to, the central recordkeeping agency. The concept allows the Authority to protect the system's core infrastructure if the agency fails.
• Securities Appellate Tribunal (Section 2(1)(s)): the Tribunal established under Section 15K of the SEBI Act, 1992, which hears appeals against PFRDA orders.
• Notification, prescribed and regulations (Section 2(1)(k), (o) and (q)): respectively, publication in the Official Gazette, prescription by rules of the Central Government, and regulations made by the Authority.

5. Borrowed Definitions (Section 2(2))

Words used but not defined in the Act carry the meanings given to them in the Insurance Act, 1938, the Companies Act, 1956, the Securities Contracts (Regulation) Act, 1956 and the SEBI Act, 1992. References to the Companies Act, 1956 are now read as references to the corresponding provisions of the Companies Act, 2013, under the General Clauses Act. The borrowing reflects the close links between pension, insurance and securities regulation.

6. Related Topics and Provisions

• Object, scope and scheme
• The National Pension System
• Central Recordkeeping Agency
• Pension funds and the NPS Trust