homefinance NewsPension regulator eyes Rs 12 lakh crore NPS corpus by year end, urges private sector participation
Pension regulator eyes Rs 12 lakh crore NPS corpus by year-end, urges private sector participation
PFRDA Chairman Deepak Mohanty notes a steady yearly increase of 26 percent in the NPS corpus, and is optimistic it will reach Rs 12 lakh crore by the end of the year. The regulator is also gearing up to launch the systematic withdrawal plan (SWP) option in October, 2023. Excerpts from an exclusive chat with CNBC-TV18.
The Pension Fund Regulatory and Development Authority (PFRDA) on Tuesday (September 26) said the National Pension System (NPS) corpus has grown significantly, reaching Rs 10.22 lakh crore from Rs 9 lakh crore last March.
Speaking exclusively to CNBC-TV18's Sapna Das, Deepak Mohanty, the Chairman of PFRDA, expressed optimism about the potential for NPS, citing the strong performance of both equity and debt markets.
"We hope that by the end of the year, we should get at least Rs 12 lakh crore in corpus," he said. He bases this on the steady increase of 26 percent per year in the NPS corpus.
However, he also pointed out the low participation of the private sector in NPS, with only 18 lakh corporate employees enrolled. To rectify this, the PFRDA is actively engaged with trade bodies to promote NPS participation. "I have 'nudged' corporates and CPSEs to join NPS. We have reached out to trade bodies CII, FICCI, and ASSOCHAM," Mohanty said.
He emphasised that NPS not being mandatory provided employees with a choice, and he hoped that more private sector companies would come on board.
The PFRDA is also actively working to onboard central public sector enterprises (CPSEs). 69 of the 200 CPSEs are already under the NPS umbrella, and Mohanty believes that reaching out directly to CPSE heads could lead to a significant increase in the NPS' corpus.
PFRDA, meanwhile, is also standing by its requests to the government to amend the Act to make NPS more acceptable and attractive. Some of these amendments include enshrining the separation of the NPS Trust and PFRDA in law. Some of the pther potential amendments to the PFRDA law that have been discussed include giving it the freedom to design new pension products.
These requests are under government consideration, and Mohanty indicates that a final decision will be contingent on parliamentary action. "I understand this is under the consideration of the government and then we will see when it is put through Parliament," he pointed out.
"...these are the substantive points which PFRDA has suggested... It has been discussed, and there has been interaction but when these will go to Parliament is a different matter," Mohanty added.
Meanwhile, the PFRDA is set to launch a systematic withdrawal plan (SWP) option in October. This will allow regular withdrawals from the NPS corpus once the subscriber attains 60 years of age.
The PFRDA is observing October 1 as the National Pension System Diwas to promote pension and retirement planning among the citizens of India.
The pension regulator aims to encourage every citizen (working professionals and self-employed professionals) to plan towards creating a pension corpus to ensure a financially sound future after retirement.
National Pension System, a government-run investment scheme, gives the subscriber the option to set the preferred allocation to different asset classes. NPS 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 a voluntary savings account associated with the Pension Regulatory Authority of India (PRAN).
(Edited by : Shoma Bhattacharjee)
First Published: Sept 26, 2023 5:37 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Supreme Court says it may consider interim bail for Arvind Kejriwal due to ongoing Lok Sabha polls
May 3, 2024 4:57 PM
10% discount on fare on Mumbai Metro lines 2 and 7A on May 20
May 3, 2024 2:40 PM