PFRDA Issues Revised Audit Guidelines for NPS, NPS Vatsalya and Atal Pension Yojana Service Providers

The Pension Fund Regulatory and Development Authority (PFRDA) has introduced a revised audit framework for intermediaries operating under the National Pension System (NPS), NPS Vatsalya, and Atal Pension Yojana (APY). The updated regulatory framework is aimed at enhancing governance standards, strengthening compliance monitoring, and improving safeguards for pension subscribers.

Risk-Based Audit Frequency Introduced

Under the revised framework, the frequency of audits will be linked to the size of the subscriber base managed by Points of Presence (PoPs).

For NPS operations, PoPs managing 10,000 or more subscribers will be required to undergo annual audits. Entities with subscriber bases below 10,000 will be subject to audits once every three financial years. Further, PoPs maintaining fewer than 100 NPS accounts have been exempted from mandatory submission of audit reports.

For APY operations, annual audits will be mandatory for PoPs with one lakh or more subscribers. Smaller entities will be audited once every three years, while PoPs handling fewer than 1,000 APY accounts will not be required to submit audit reports.

Independent External Audits Mandated

PFRDA has directed intermediaries engaged in NPS, NPS Vatsalya and APY activities to conduct audits through independent external Chartered Accountant firms or audit firms. The requirement has been prescribed through separate regulatory circulars applicable to the respective schemes.

Auditor Eligibility and Tenure Requirements

The revised norms also introduce stricter eligibility conditions for auditors. Audit firms undertaking these assignments must be empanelled with financial sector regulators, including PFRDA.

In addition, audit engagements will be limited to a fixed tenure of three years. Upon completion of the assignment period, the audit firm will be subject to a mandatory cooling-off period of two years before becoming eligible for reappointment.