NPS Assets To Reach Rs 15 Lakh Crore By End Of Fiscal Year: PFRDA Chairman

Speaking at the Association of NPS Intermediaries launch, Mohanty highlighted that employee participation in the corporate sector continues to be a challenge

The assets under management (AUM) of the National Pension System (NPS) are projected to reach Rs 15 lakh crore by the end of the current fiscal year, according to Pension Fund Regulatory and Development Authority (PFRDA) Chairman Deepak Mohanty.

Speaking at the Association of NPS Intermediaries launch, Mohanty highlighted that employee participation in the corporate sector continues to be a challenge. The newly formed association includes pension fund managers, points of presence (both bank and non-bank), central record-keeping agencies, trustee banks, custodians, aggregators, annuity service providers, pension agents, retirement advisors, and other industry participants.

Its primary objective is to represent the interests of all intermediaries within the NPS ecosystem, promote NPS as a reliable, flexible, and tax-efficient retirement product, ensure subscriber welfare through transparent processes, and collaborate with regulators and policymakers to enhance 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.

Out of the 1.6 crores NPS subscribers, 62 lakh are from the private sector, while 18 lakh belong to 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 marks 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 highlighted the immense potential of NPS, noting that 80 per cent of the country's workforce is in the informal sector.

He emphasised that expanding NPS can be achieved through various approaches, including broadening the intermediary base. Additionally, he mentioned that PFRDA has urged sponsor banks, particularly Regional Rural Banks (RRBs), to offer NPS, as they have successfully promoted the Atal Pension Yojana in semi-urban and rural areas.

"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.