From the Interim PFRDA to the Statutory Authority: Transfer of Assets and Liabilities (Section 13)

For more than ten years before the PFRDA Act came into force, the pension system was supervised by an Interim PFRDA created by executive resolution. It appointed intermediaries, signed contracts, held funds and was a party to legal proceedings. When Parliament created the statutory Authority, it had to ensure that this activity continued without interruption. Section 13 does so by transferring everything from the Interim Authority to the new body.

1. The Interim PFRDA

• Creation: set up by the Central Government through Resolution No. F. No. 5/7/2003-ECB&PR dated 10 October 2003 and F. No. 1(6)/2007-PR dated 14 November 2008 (Section 2(1)(f)).
• Functions: to regulate and develop the new pension system notified on 22 December 2003, pending legislation.
• Legal limits: as a body created by executive resolution, it had no statutory powers to impose penalties, search premises or make binding regulations; it relied on contracts with intermediaries and Government directions. This was a central reason for seeking legislation.
• Achievements: it set up the system's architecture: the central recordkeeping agency, pension funds, the NPS Trust, the trustee bank and points of presence, and extended the NPS to States, all citizens and corporates.

2. Transfer to the Statutory Authority (Section 13)

On and from the date of establishment of the statutory Authority:

• (a) Assets and liabilities: all assets and liabilities of the Interim Authority stand transferred to and vested in the Authority. The Explanation defines assets widely, to include all rights and powers, all movable and immovable property, cash balances, deposits and other interests, and all books of account and documents; and liabilities to include all debts, liabilities and obligations of whatever kind.
• (b) Contracts and obligations: all debts, obligations and liabilities incurred, all contracts entered into, and all matters and things engaged to be done by, with or for the Interim Authority are deemed to have been incurred, entered into or engaged to be done by, with or for the Authority.
• (c) Money due: all sums due to the Interim Authority are deemed due to the Authority.
• (d) Legal proceedings: all suits and legal proceedings instituted, or which could have been instituted, by or against the Interim Authority may be continued or instituted by or against the Authority.

3. Continuity of the NPS

• Deemed NPS (Section 20(1)): the contributory pension system notified on 22 December 2003 is deemed to be the National Pension System with effect from 1 January 2004, so that subscribers' accounts and contributions from 2004 onwards fall under the Act without re-enrolment.
• Intermediaries: the contracts with the CRA, pension funds and other intermediaries passed to the Authority under Section 13(b), and the intermediaries were then brought under registration and regulations under the Act.
• Former office-holders: persons who held office in the Interim Authority are barred for two years from appointments in regulated pension entities without Central Government approval (Section 7(2)).

4. Related Topics and Provisions

• Pension reform in India
• Establishment and composition
• The National Pension System