New audit framework rolled out for NPS, Atal Pension Yojana service providers

The Pension Fund Regulatory and Development Authority (PFRDA) has rolled out a revised audit framework for intermediaries operating across the National Pension System (NPS) and Atal Pension Yojana (APY), in a move aimed at strengthening compliance standards and subscriber protection.

In separate circulars, the regulator directed Points of Presence (PoPs) handling NPS, NPS Vatsalya and APY operations to conduct periodic audits through independent external chartered accountants or audit firms.

Under the revised framework, audit frequency will now depend on the size of the subscriber base managed by the intermediary.

For NPS, PoPs with 10,000 or more subscribers will have to undergo annual audits, while entities with fewer than 10,000 subscribers will be audited once every three financial years. PoPs with fewer than 100 NPS accounts have been exempted from mandatory audit report submission.

For APY, annual audits

will apply to PoPs with 1 lakh or more subscribers, while smaller entities will undergo audits once in three years. PoPs with fewer than 1,000 APY accounts have been exempted from filing audit reports.

The regulator has also tightened auditor eligibility norms. Audit firms must be empanelled with financial sector regulators, including PFRDA, and will be appointed for a fixed three-year tenure followed by a two-year cooling-off period.

The expanded audit scope covers subscriber onboarding, KYC and anti-money laundering compliance, contribution processing, cyber security controls, grievance handling, exit and withdrawal processing, maintenance of audit trails and fraud prevention mechanisms.

For NPS operations, auditors will also examine unreconciled contribution balances, pension agent activities, compensation paid for delayed transactions and compliance with operational turnaround timelines. In APY, the framework additionally focuses on government co-contribution credits, pension amount changes, death claims and monitoring of pension agents and business correspondents.

PFRDA said the revised norms are intended to improve transparency, strengthen internal controls and ensure better protection of pension subscribers across schemes.

The circulars also warn that failure to submit audit reports within prescribed timelines could invite regulatory action, including audits initiated directly by the authority.