PFRDA Targets Rs 100 Lakh Crore NPS Corpus by 2040

The Pension Fund Regulatory and Development Authority (PFRDA) is targeting an expansion of the National Pension System (NPS) corpus to around Rs100 lakh crore by 2040, leveraging banks’ extensive distribution networks and the Unified Payments Interface (UPI) ecosystem.

PFRDA Chairman S. Ramann, speaking at the Tatkal NPS: Advancing Digital Pension Inclusion conference, said the growing need for long-term savings in India provides significant scope for expanding pension coverage.

The regulator is working to make NPS enrolment seamless through UPI and existing digital banking platforms, enabling customers to open pension accounts with minimal intervention.

Ramann said the proposed mechanism would also provide banks with a low-cost route to acquire NPS customers through their existing digital infrastructure. PFRDA is seeking to make banks a key distribution channel for NPS, given their large customer base and established digital platforms.

The regulator is also working to improve the financial viability of pension distribution. According to Ramann, revenues of the top 10 Points of Presence (POPs) have increased four to five times following changes in the commission structure implemented from January 1 this year.

On the investment front, PFRDA is moving towards differentiated pension schemes and asset-allocation options to cater to the varying requirements of government employees, informal-sector workers and financially sophisticated investors. PFRDA is also examining ways to channel a larger share of pension savings into growth-oriented assets, including unlisted equity, project finance and Greenfield and Brownfield projects, in addition to existing investments through REITs and InvITs.

The Chairman emphasised that expanding pension coverage is crucial for addressing longevity risk and ensuring adequate financial security for citizens during their post-retirement years.