Section 12 in Pension Fund Regulatory and Development Authority (National Pension System Trust) Regulations, 2015
12. Obligations, duties, responsibilities and liabilities of Board of Trustees.
- The Board of Trustees shall be responsible for the monitoring of the operational and service level functions under the National Pension System or any other pension scheme regulated under the Act, if it isso directed by the Authority. The scope of the National Pension System Trust role shall include activities relating to exit of the subscriber from the National Pension System, redressal of subscriber grievances in accordance with the Pension Fund Regulatory and Development Authority (Redressal of Subscriber Grievance) Regulations, 2015 and other responsibilities, in particular, the following shall be obligations, duties, responsibilities and liabilities of the Board of Trustees, namely:-(a)the Board of Trustees (hereafter to be referred as it) shall execute the individual pension account [as defined in clause(e) of sub-section (1) of section 2 of the Act] in its name with the subscriber;(b)it shall be responsible for approving audited scheme financials, internal audit reports, inspection, compliance reports and any other reports, as specified by the Authority, which are to be submitted by the intermediaries to the National Pension System Trust. Such approved scheme and reports shall be presented to the Authority with qualifications and recommendations, if any, made by it:Provided that the recommendations shall not be binding on the Authority in any manner;(c)it shall be liable only to the extent of the assets available and funds flows to National Pension System Trust;(d)no trustee shall be liable for the act, omission, default of any other trustee or for any loss experienced by the National Pension System Trust on account of any error of bonafide judgment on his or her part or for any other loss or damage whatsoever that may occur in relation to the execution of his or her duties as a trustee or in relation thereto, unless the same be caused by wilful act or negligence or omission or commission on part of the trustee. Notwithstanding anything contained in these regulations, the trustees shall not be held liable for acts done in good faith if they have exercised adequate due diligence and honesty;(e)the trustees shall have the benefit of all indemnities conferred upon trustees by the Indian Trusts Act, 1882 (2 of 1882);(f)it shall be its responsibility to carry out its duties and responsibilities and to maintain arms' length relationship with other intermediaries, companies or institutions or bodies corporate with which the trustees may be associated;(g)it shall be its duty to take into its custody or under its control all the property of the trust, held by intermediaries, in trust for the beneficiaries;(h)it shall be its duty to act always in the interests of the beneficiaries;(i)it shall be its duty to provide or cause to provide information to the beneficiaries and the Authority as may be required by the Authority from time to time;(j)it shall supervise the collection of any income due on assets held in the name of the National Pension System Trust and for claiming any repayment of tax and holding any income received in trust for the beneficiaries in accordance with the Trust Deed and, the regulations, guidelines or directions issued by the Authority;(k)it shall not acquire any asset out of the pension funds which involves the assumption of any liability which results in encumbrance of the property of the National Pension System Trust or that of the subscribers in any way;(l)it shall execute all operational agreements with intermediaries under the National Pension System including the pension funds, Trustee Bank, central recordkeeping agency, aggregators, point of presence, custodian or any other person including an annuity service provider;(m)it shall be its duty to take all care to ensure that the pension funds are managed in accordance with the provisions of the Act, Trust Deed and these regulations, or any guidelines or directions issued by the Authority;(n)the Chief Executive Officer of the National Pension System Trust shall maintain records of the decisions taken by the Board of Trustees at its meetings and the minutes of the meetings. The trustees shall adhere to a Code of Conduct as specified in Schedule II;(o)it shall communicate in writing to the pension funds and other intermediaries of the deficiencies and also keep checks on the rectification of such deficiencies;(p)it shall ensure that the intermediaries are conducting their activities in accordance with the applicable regulations in force and any guidelines, notifications or circulars issued by the Authority and the operational agreements executed between the National Pension System Trust and such intermediaries;(q)where it has reason to believe that the conduct of business of the intermediary is not in accordance with clause (p),it shall forthwith take such remedial steps as are necessary and shall immediately inform the Authority of the violation and the action taken thereafter;(r)it shall review the scheme performance and may review any or all transactions carried out by the pension funds on an ongoing basis, and submit exception reports along with its recommendations to the Authority;(s)it and the pension fund shall, with the prior approval of the Authority enter into an investment management agreement and such other agreements as may be deemed necessary for the protection of subscribers' interest and information;(t)it shall open and operate accounts with the Trustee Bank, custodian as may be necessary on behalf of the subscribers;(u)it shall have the duty to disseminate information and provide publicity to National Pension system and for which purpose it may receive funds from the Authority;(v)its interaction with other National Pension System intermediaries shall be guided by regulations, directions or guidelines issued by the Authority from time to time;(w)it may, through a written approval, authorize any intermediary to expend a pre-determined amount on activities such as legal counselling, engaging advocates and consulting in the benefit of subscriber interest. It must, during the meeting where the agenda for such approval is placed, record the reason for such authorization in accordance with guidelines laid down by the Authority;(x)it may approve payment of fees or charges to the intermediaries as may be decided by the Authority from time to time;(y)it shall furnish to the Authority on quarterly basis-(i)report on the activities of the Trust;(ii)a certificate stating that it has satisfied itself that there have been no instances of self dealing or front running by any of the trustees, directors and key personnel of the pension fund;(iii)a certificate to the effect that the pension funds have been managing the scheme independently of any other activities and that the pension fund has taken adequate steps to ensure that the interest of subscribers are protected;(iv)exception reports; and(v)recommendations on further course of action on deviations.The Authority may call for such information on a monthly basis, which shall be furnished by the Chief Executive Officer;(z)it ensures the dissemination of adequate, accurate, explicit and timely information about the investment policies, investment objectives, financial position and general affairs of the scheme to the subscribers in a fairly simple language;(za)it has to ensure that all intermediaries maintain segregated bank account and other books of accounts pertaining to activities under National Pension system;(zb)it shall authorise the Trustee Bank to act as its agent for the purpose of banking the funds in accordance with the provisions of the Act or the regulations made or guidelines or directions issued by the Authority;(zc)it shall ensure that the central recordkeeping agency exercises all due diligence and vigilance in carrying out its duties and in protecting the rights and interests of the subscribers and comply with the terms and conditions of the agreement between the National Pension System Trust and the central recordkeeping agency;(zd)it shall ensure that the point of presence and aggregators exercises all due diligence and vigilance in carrying out its duties and in protecting the rights and interests of the subscribers and comply with the terms and conditions of the agreement between the National Pension System Trust and such intermediaries, as the case may be.
