Making National Pension System (NPS) Accessible: PFRDA Chairman’s Efforts
Introduction: NPS
Pension Fund Regulatory and Development Authority (PFRDA) Chairman, Deepak Mohanty, is actively working towards expanding the availability of the National Pension System at all bank branches and post offices. The objective is to enhance the reach of pension schemes by ensuring easy access to NPS products for the general public.
Expanded Distribution Channels: NPS
To accomplish this goal, PFRDA has collaborated with Regional Rural Banks (RRBs) and banking correspondents. This strategic partnership aims to make NPS benefits easily available, even in villages and small towns.
Challenges and Decision-Making Authority: NPS
While PFRDA has held discussions at the highest management levels regarding the wide availability of NPS, the ultimate decision lies with the banks. Efforts are underway to encourage all banks to make NPS accessible through their branches and post offices.
Increasing Subscribership: NPS
The mission is to add 13 lakh NPS subscribers across the private sector, encompassing corporate and individual levels. Last fiscal year witnessed an addition of 10 lakh subscribers, highlighting the growing popularity of the scheme.
Current Subscriber Statistics:
As of September 16, 2023, the total number of subscribers stood at 1.36 crore (excluding NPS Lite subscribers). Additionally, there are 5 crore customers enrolled in the Atal Pension Yojana.
Flexible Pension Amounts:
Mohanty addresses the issue of fixed pension amounts, stating that it is not practical due to long-term considerations. Even in countries with pension funds exceeding 100% of GDP, challenges arise. However, he assures that the National Pension System offers excellent returns and the potential for substantial corpus growth over time.
Pension Assets and GDP Contribution:
Pension-related assets, including EPFO pension products and life insurance, contribute to 16.5% of India’s GDP. Currently, the National Pension System and Atal Pension Yojana account for 3.6% of the GDP.
Impressive Returns:
According to the PFRDA, equity investments under pension schemes have generated a return of 12.84% since inception. Government employees can expect returns of up to 9.4% from the National Pension System.
Low-Cost Focus:
Mohanty acknowledges that the commission for selling National Pension System is relatively low, which may discourage agents. However, the primary goal is to keep NPS a cost-effective product that benefits customers.
Projected Assets Under Management:
For this financial year, assets under management for NPS and Atal Pension Yojana are estimated to reach at least Rs 12 lakh crore, currently standing at Rs 10.22 lakh crore. Atal Pension Yojana’s share of the total funds under management amounts to around Rs 35,000 crore.
Conclusion:
Under the visionary leadership of Chairman Deepak Mohanty, PFRDA is diligently striving to make NPS widely accessible across bank branches and post offices. These efforts aim to increase the reach and popularity of pension schemes, ultimately benefiting the public with a secure retirement plan.
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