The National Pension System (NPS) assets under management (AUM) will soon cross Rs 10 lakh crore mark, Pension Fund Regulatory and Development Authority (PFRDA) Chairman Deepak Mohanty said in an exclusive interaction with CNBC-TV18. Currently, the NPS AUM is at Rs 9.8 lakh crore and will certainly be more than Rs 11 lakh crore by FY24 end, Mohanty said.
"Markets are doing well currently. So, accumulation is also quite good. We are confident of good growth in NPS AUM due to higher subscribers and market conditions," he told CNBC-TV18.
Notably, NPS reached 10 lakh private sector subscribers in FY23 and the PFRDA Chairman said they are now aiming for 13 lakh private sector NPS subscribers in FY24.
NPS is a government-run investment scheme that gives subscribers the option to set the preferred allocation to different asset classes. It gives individuals an opportunity to invest and accumulate savings, providing them with a lump sum and an annuity amount as regular income from an annuity service provider upon superannuation.
It offers two kinds of accounts — tier 1 and tier 2 — for instruments, including government bonds, equity market, and corporate debt. While the tier 1 NPS account is strictly a pension account, the tier 2 account — known as an investment account — is voluntary savings account associated with the Pension Regulatory Authority of India (PRAN).
The returns in NPS depend on the selection of the pension fund managers (PFMs), investment options, asset allocation, time horizon of investment and risk appetite, i.e., whether one is an aggressive or conservative investor and the period for which one shall remain invested under NPS.
Experts call it a safe bet as it is tightly regulated by PFRDA. The pension funds are managed professionally and transparently, thereby providing investors with the necessary assurance that their money is safe.
First Published: Jul 18, 2023 5:29 PM IST
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