PFRDA Overhauls Audit Requirements for NPS-Lite Points of Presence: What PoPs Must Know
The Pension Fund Regulatory and Development Authority has significantly restructured its audit compliance framework for Points of Presence engaged in NPS-Lite operations. Issued vide Circular No. PFRDA/2026/38/SUP-POP/07 dated 17th June 2026, this regulatory directive establishes a comprehensive triennial audit mechanism that all qualifying PoPs must adhere to without exception. This article provides a structured breakdown of the circular's requirements, audit scope, eligibility conditions for auditors, reporting timelines, and procedural guidelines.
Background and Regulatory Basis
Points of Presence registered under Regulation 3(1)(c) of the Pension Fund Regulatory and Development Authority (Points of Presence) Regulations, 2018 and its subsequent amendments, who carry out NPS-Lite activities, are now obligated to ensure that all accounts and processes maintained under NPS-Lite operations are subjected to independent external audit.
This revised framework operates in alignment with the Operational Guidelines issued under Circular dated 27th February 2026 under the PFRDA (PoP) Regulations, 2018. The audit must be conducted by an independent external chartered accountant or an empanelled audit firm satisfying the eligibility norms prescribed by the Authority.
The regulatory basis for the Authority's power to independently arrange audits in cases of default is Regulation 27 of the Pension Fund Regulatory and Development Authority (Point of Presence) (Amendment) Regulations, 2026.
Audit Periodicity and Submission Timeline
Triennial Reporting Cycle
One of the most significant departures from prior practice under this circular is the introduction of a three-year audit cycle. Rather than annual submissions, PoPs performing NPS-Lite activities are now required to submit a consolidated audit report covering all three financial years within a single report, submitted once every three years.
Important: The audit report must be submitted within three months from the end of the relevant financial year, or within such other period as the Authority may specify from time to time.
First Audit Report Under the Revised Framework
- The first audit cycle under the new framework commences from 1st April 2026 and covers the period ending 31st March 2027.
- The first consolidated audit report covering FY 2026-27, FY 2027-28, and FY 2028-29 must be submitted within three months from the end of FY 2028-29.
- This obligation is conditional upon the audit report for FY 2025-26 having already been submitted to the Authority under the earlier framework.
Scope of Audit Under the Revised Framework
The circular prescribes a broad and detailed scope of audit, which is explicitly stated to be indicative and not exhaustive. The appointed auditor is expected to examine the following areas:
1. Subscriber Contribution Processing
- Collection and processing of initial and subsequent contributions received from NPS-Lite subscribers.
- Uploading of the Subscriber Contribution File (SCF) into the CRA System.
- Transfer of funds to the Trustee Bank within specified turnaround times (TATs).
- Maintenance of the collection account by the PoP as per PFRDA (PoP) Regulations, 2018.
- Reconciliation of subscriber contributions in the collection account and maintenance of a proper audit trail.
- Identification of unreconciled contribution amounts pending for more than seven years and recording of efforts taken to reconcile such amounts.