‘National Pension System assets under management to touch Rs 15 lakh crore by fiscal-end’

The assets under management (AUM) of the National Pension System are expected to touch Rs 15 lakh crore by the end of current fiscal year, Pension Fund Regulatory Development Authority Chairman Deepak Mohanty said on Saturday.

At a media interaction following the official launch of the Association of NPS Intermediaries, Mohanty also said the take-up rate by the employees in the corporate sector remains a challenge.

This Association of NPS comprises stakeholders including pension fund managers, points of presence (bank and non-bank), central record keeping agencies, trustee banks, custodians, aggregators, annuity service providers, pension agents, retirement advisors, and other industry participants.

The association aims to represent the interests of all intermediaries in the NPS ecosystem, promote NPS as a reliable, flexible, and tax-efficient retirement product, focus on subscriber welfare by ensuring smooth and transparent processes within the system and also to collaborate with regulators and policymakers to improve the NPS framework.

“The total subscribers (in the pension sector) at this moment are more than 8 crore (including 6.4 crore in Atal Pension Yojana), out of which in NPS there are about 1.6 crore subscribers and the corpus what people are contributing to the pension system is almost Rs 14 lakh crore, and given that situation, our expectation is that by the end of the year, it should Rs 15 lakh crore,” Mohanty said.

Of the 1.6 crore NPS subscriber base, 62 lakh are from the private sector and 18 lakh from the corporate sector.

“So, that is the big challenge. We have about 18,000 corporates, including big corporates, who have joined NPS, but the take up rate by employees is less partly because there are so many things (and) partly, because of lack of awareness that we are trying to expand,” he said.

The launch of the Association of NPS Intermediaries is a significant milestone for the pension sector, he said adding, “I am confident it will further strengthen and redouble our efforts in creating awareness to expand pension coverage in India through collective efforts and feedback mechanism.”

He noted that the pension potential for NPS is very high as 80 per cent of the workforce in the country is in the informal sector.

He said there are different ways of expanding NPS with expanding the intermediary base among one of them, and added that PFRDA has requested the sponsor banks—of RRBs that they should provide NPS as they being in the semi-urban and rural areas are doing well in case of Atal Pension Yojana.

“So, we are expanding the intermediary base and to target younger cohort of population, we are collaborating with the digital companies by giving them POP (point of presence) licence so that they can reach the younger cohort and those who are digitally savvy...Other thing would be awareness, that we do the outreach camp and as I was mentioning that we have also set up an association.

“The need is quite huge to enhance the understanding about this  pension scheme and the regulator alone or government alone cannot do that. So, collectively we are trying to...reach out to various segments of the population,” Mohanty said.

Stating that NPS is giving “very good” returns, he said that the annual return in the equity scheme from the inception is 14.4 per cent adding that in the mix of equity and debt, the central government NPS is giving a return of 9.6 per cent from the beginning, which are quite competitive.

Earlier addressing virtually the launch event, Nagaraju Maddirala, Secretary, Department of Financial Services said, “This association will serve as a vital platform for dialogue, collaboration, and innovation in the NPS ecosystem. It will play a pivotal role in addressing challenges and unlocking opportunities to expand pension coverage in India.”

Rama Mohan Rao Amara, MD of State Bank of India; Siddhartha Mohanty, Chairperson of LIC; Amitabh Chaudhry, MD & CEO of Axis Bank Ltd and Animesh Mishra, Additional Central Provident Fund Commissioner, EPFO, also addressed the launch event.