The Pension Fund Regulatory and Development Authority (PFRDA) has taken a significant step towards enhancing retirement income security by constituting a high-level expert committee to develop a regulatory framework for assured payouts under the National Pension System (NPS). This initiative represents a crucial development in India's pension ecosystem, aimed at providing subscribers with greater certainty in their post-retirement income while preserving the market-linked characteristics that define the NPS.

Committee Composition and Leadership

The expert committee will be chaired by M S Sahoo, founder of Dr Sahoo Regulatory Chambers and former chairperson of the Insolvency and Bankruptcy Board of India (IBBI). The panel comprises 15 members with diverse expertise across multiple domains:

The committee has been authorized to seek inputs from external experts and intermediaries during its deliberations, ensuring comprehensive coverage of all relevant aspects.

Key Mandate and Objectives

The committee's primary responsibility involves designing regulations for assured payout products, with particular focus on options outlined in PFRDA's consultation paper issued on September 30, 2025. The panel will function as a standing advisory body specifically dedicated to structured pension payouts.

Core areas of focus include:

• Developing guidelines for assured payout products within NPS framework
• Examining transition mechanisms from accumulation to payout phases
• Assessing market-based models providing legally enforceable assurances
• Evaluating novation and settlement structures for subscriber protection

Operational Framework Development

The committee will address several critical operational aspects to ensure robust implementation of assured payout mechanisms:

Strategic Impact on Retirement Security

This initiative aligns with PFRDA's broader objective of strengthening India's pension ecosystem and supporting long-term financial security for retirees. The assured payout framework aims to address subscriber concerns about market volatility affecting retirement income while maintaining the fundamental market-linked nature that has characterized the NPS since its inception.

The committee's work will focus on creating structured and reliable pension payout options that provide subscribers with enhanced certainty regarding their post-retirement financial planning. By developing comprehensive regulations covering operational, financial, and regulatory aspects, the framework seeks to balance income security with market participation benefits.

Implementation Timeline and Next Steps

The committee has been tasked with drafting guidelines and regulations in accordance with PFRDA Act provisions. As a standing advisory body, the panel will continue to provide ongoing guidance on structured pension payout developments, ensuring the framework remains responsive to evolving market conditions and subscriber needs.

This development represents a significant milestone in India's pension sector evolution, potentially transforming how NPS subscribers approach retirement planning by offering greater income predictability alongside continued market participation benefits.

The Pension Fund Regulatory and Development Authority (PFRDA) has strengthened authentication requirements for paperless National Pension System (NPS) account opening by making OTP-based or electronic signature verification mandatory for online registrations.

New Authentication Requirements

Under the revised framework, applicants opening NPS accounts online must now authenticate their registration through one of two methods:

• Electronic signature (e-sign) verification
• One-time password (OTP) sent to their registered mobile number

The regulator has clarified that applicants' consent and mandatory declarations for opening an NPS account must be explicitly obtained at the end of the online onboarding journey through these authentication methods.

Implementation Framework

PFRDA has directed Central Recordkeeping Agencies (CRAs) and Points of Presence (POPs) to align their systems and subscriber onboarding processes with the updated requirements. This involves changes to digital workflows to ensure authentication and consent capture occur as specified in the new guidelines.

Regulatory Background

The circular partially modifies an earlier directive issued in June 2020, which had allowed digital submission of NPS account opening forms using e-sign or OTP. The current update specifically mandates these authentication methods rather than treating them as optional features.

PFRDA issued this circular under the powers conferred by Section 14 of the Pension Fund Regulatory and Development Authority Act, 2013. The change aims to strengthen subscriber authentication while continuing to support paperless account opening processes.

System Integration Requirements

The updated requirements necessitate system modifications across the NPS ecosystem. CRAs and POPs must ensure their digital platforms can capture explicit consent and mandatory declarations through the specified authentication methods at the conclusion of the online onboarding process.

The National Pension System operates as a voluntary, long-term retirement savings scheme regulated by PFRDA, with CRAs and POPs playing crucial roles in subscriber registration, recordkeeping, and servicing functions.