Expressnews
Chennai- June 2024
1. Recent Milestones achieved by NPS / APY:
▪ 12 Lakh Cr. AUM on 14th May 2024.
▪ AUM has increased from Rs 10 lac crore to Rs 12 lac crore in less than 9 months (24 August 2023 to 14th May 2024).
▪ Private Sector AUM reached 2.36 Lakh Cr. as on 18thMay 2024.
▪ The number of subscribers under private sector has reached 56.1 Lakhs
▪ Share of Private Sector Subscribers in NPS has increased from 21.6% in Mar-19 to 37.5% in Mar-24.
▪ Share of Private Sector AUM in NPS has increased from 13.1% in Mar-19 to 20% in Mar-24.
▪ In FY 2023-24, 9.4 lakh subscribers have on-boarded under NPS.
2. Subscriber-centric initiatives undertaken:
a. DSP Pension Fund Managers Pvt Ltd has been registered as the 11th Pension fund; Certificate of commencement of business has been issued to the PF.
b. Systematic lump-sum withdrawal.
c. Choice of multiple PFs for each Asset Class.
d. 100% investment in Equity is allowed under Tier-II.
e. NPS account under Corporate Sector Model would be auto continued at the age of 60 or superannuation age.
f. Annuity purchase can be deferred up to the age of 75 years.
g. NPS withdrawal form may be considered as Annuity proposal form for offering the immediate annuity product by ASPs.
h. Launch of Balanced Life Cycle (BLC) Fund as an additional investment avenue with enhanced equity exposure under an LC fund.
3. Initiatives for a favorable NPS ecosystem:
a. Industry body for pension advocacy like AMFI & Insurance Council comprising representatives of intermediaries in the NP architecture.
b. Risk profiling of Schemes – Asset Classes managed by Pension Funds
c. Rationalization of regulations/compliance reduction.
4. Pivotal role played by the Distribution channel –
a. Registered PoPs – PSBs, Pvt Banks, RRBs, SFBs, NBFCs, Fintech Co.
b. Spreads awareness about pensions, need for retirement planning and how NPS & APY ensures old age income security for citizens.
c. Provides last mile connectivity – acts as an interface between subscriber and NPS architecture – on-boarding, servicing and counselling.
d. Updates its clients on benefits of NPS/APY through routine communications and social media messaging.
e. Reaches out to the big corporates for increase employee participation
f. Channelizes household savings into investment (pension planning) and enables creation of a pensioned society.
5. Why subscribers are choosing NPS-
a. In the unorganized sector, with no formal pension arrangements, individuals doing retirement planning on their own.
b. NPS provides a worthy alternative- It is a Regulated, professionally managed, Low cost, Transparent and Portable pension plan well suited for any individual planning to save and invest for his/ her old age income security.
c. Provides flexibility of contributions and multiple choices of Pension Funds and asset allocation to accumulate a decent retirement corpus.
d. NPS has various tax incentives and has generated attractive and competitive returns by the PFs.
e. Tier I- Mandatory, non-withdrawable pension account and Tier II- Withdrawable & Short-term investment account.
6. PFRDA’s steps towards capacity building and outreach
a. Broad basing the distribution network through- Points of Presence (PoP)- PSBs, Pvt Banks, RRBs, SFBs, NBFCs, Fintech Companies
b. Incentivizing the distribution partners
c. PFRDA is part of National Centre for Financial Education (NCFE)
d. PFRDA takes NPS/APY awareness initiatives through:
– Tie-ups with trade bodies – FICCI, ICC, CII.
– Awareness session to Corporates
– Annuity Literacy Programme (ALP)
– Engagement o Retirement Planners (RP)
– Subscriber Awareness Programmes by CRAs.
– Trainings on NPS/APY through empanelled Training Agency
– Hosting of Pension Literacy Website – Pension Sanchay
– Social Media Campaigns – Facebook, Twitter, LinkedIn, YouTube.
– Advertisements through print/digital media, radio, TVC, etc.
– Observing ‘NPS Diwas’ on 1st Oct which is designated by UN as the International Day of Older Persons.
