PFRDA Introduces Two-Factor Aadhaar Authentication for NPS Transactions

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Enhanced Security Measures for Government Nodal Offices

The Pension Fund Regulatory and Development Authority (PFRDA) has issued new security directives under its “Digital Safety Practices for Government Nodal Offices Under NPS Architecture Advisory, 2024”. Starting April 1, 2024, approximately 1,600 government offices involved in managing the National Pension System (NPS) will be required to implement two-factor Aadhaar authentication to access the Central Recordkeeping Agency (CRA) system.

Key Enhancements and Their Impact

1. Transition from Single to Two-Factor Authentication:
   • Previous System: Initially, Nodal Offices accessed NPS transactions using a password-based login system.
   • New Requirement: The introduction of an additional Aadhaar-based authentication layer aims to minimize the risks of unauthorized access, thereby enhancing the security of NPS transactions.
2. Integration and Implementation:
   • Aadhaar Linkage: The new system will incorporate Aadhaar-based login alongside the existing user ID and password system, establishing a robust two-factor authentication process.
   • Effective Date: The mandatory implementation of this enhanced security feature is set for April 1, 2024.
3. NPS Assets Under Management:
   • Growth in AUM: As of March 16, 2024, the total Assets Under Management (AUM) for NPS have reached over Rs 11.56 lakh crore, marking a 30% increase from the previous year.
   • Government Sector Contribution: Of the total AUM, the government sector contributes Rs 8.95 lakh crore, covering around 9.2 million employees.

Organizational Overview

• Regulatory Body: Pension Fund Regulatory and Development Authority (PFRDA)
• Chairperson: Deepak Mohanty
• Headquarters: New Delhi, Delhi
• Establishment: 2003

Conclusion

These new measures by the PFRDA to incorporate two-factor Aadhaar authentication for NPS access reflect a significant step towards bolstering the security framework of pension management in India. By enhancing the authentication process, the PFRDA aims to protect the integrity of NPS transactions and ensure the safety of substantial assets managed on behalf of government employees. This proactive approach in digital safety practices is expected to set a higher standard of security within the national pension scheme infrastructure.