PFRDA had sought a single-umbrella body to regulate all pension products.
After three years of waiting, the Finance Ministry may finally take a decision on the much-debated issue of single regulator for all pension products.
Sources said that the ministry could reconstitute a committee on this matter, and the decision may come later this financial year.
Almost three years ago, Pension Fund Regulatory and Development Authority (PFRDA) had sought a final word on the matter with the government.
Currently, the National Pension System alone is regulated by PFRDA. However, pension products sold by insurance companies are overseen by the Insurance Regulatory and Development Authority of India (IRDAI) while those sold by mutual funds (MFs) come under SEBI's watch.
PFRDA, which was established with the intent of selling pure-play pension products, has for long lobbied for the exclusive right to be the watchdog.
While an expert committee was set up the finance ministry on this matter, no decision was taken. Later, the country moved into the general election phase. With the new government being formed in May 2019, this matter will now be looked at.
In earlier discussions with the Finance Ministry, PFRDA had suggested that they be allowed to regulate all pension products that exist in the Indian market. Further, they wanted the word 'pension' to be attached to only those products that were approved and regulated by them.
At present, pension products having retirement benefits as well as annuity components come under the ambit of multiple regulators. Once a single regulator is appointed, all product approvals and regulations related to pension products will be streamlined through one channel.
However, this will mean that the existing products under other regulators will come one entity.
This is not the first time that regulation of a product has come under discussion. In 2010, SEBI and IRDAI had locked horns over who will regulate unit-linked insurance plans (Ulips) that also had an element of being linked to the equity markets. The government intervened and decided that Ulips would come under the jurisdiction of IRDAI.
