Government looking into IRDA's hiring tweak

NEW DELHI: The finance ministry is examining allegations that the regulator of India's pension sector tweaked its recruitment norms to give unfair preferential treatment to employees of a state-run bank. 

Two officers of the ministry, who are aware of the development, said there are allegations that the selection process at the Pension Fund Regulatory & Development Authority (PFRDA) was altered to the advantage of applicants from IDBI BankBSE -0.97 %. 

This comes three days after the Parliament passed the PFRDA Bill 2011, giving statutory backing to the interim pension authority that had been functioning on executive orders for over a decade now PFRDA chairman Yogesh Agarwal was earlier the chairman of IDBI Bank. 

"Some complaints regarding mismanagement and favouritism in the selection process were received and responses were sought from the regulator," one of the officers quoted earlier said. 

PFRDA manages the New Pension System, a defined contribution scheme that has about 5.3 million subscribers and a corpus of Rs 35,000 crore. The finance ministry officer refused comment on whether any action was being contemplated against PFRDA, saying that "the process is being followed". 

Another officer at the ministry said, "It is alleged that around 25% of the top level employees of PFRDA are from IDBI". A detailed questionnaire sent to PFRDA chairman Yogesh Agarwal did not elicit a response till the time of going to press. 

PFRDA also refused to give details of its employees' past employers, saying the information sought was "personal". "Information sought pertains to personal information of the employee, which cannot be provided," PFRDA said in response to a Right to Information application filed by this correspondent. 

At present, there are 51 employees at PFRDA, from the rank of general assistant to executive director. "The finance ministry officials on the board of PFRDA were also not involved in the selection process," another government officer said. 

Experts are of opinion that corporate governance norms in regulators should be more strictly adhered because of their supervisory structure. "Corporate governance norms should be followed in letter and spirit. This stands true for both regulators and companies," said SK Agarwal, president at the Institute of Chartered Accountants of India. 

The Parliament on Friday passed the PFRDA Bill 2011, empowering the regulator to register and regulate pension funds, frame their investment guidelines and levy monetary penalties for violations of the PFRDA Act.

Source : http://economictimes.indiatimes.com