New Delhi: The ongoing surge in the stock market is positively impacting the National Pension System (NPS), evident from substantial growth in its Assets Under Management (AUM) and enhanced returns. The equity scheme of NPS currently boasts an impressive annual return of 36 per cent, contributing to an AUM milestone of Rs 12.5 lakh crore.
Deepak Mohanty, Chairperson of India’s pension regulator, Pension Fund Regulatory and Development Authority (PFRDA), reports a recent AUM increase of Rs 1.50 crore over the past six months. Projected growth suggests the AUM could reach Rs 15 lakh crore by March 2025, with an estimated Rs 3 lakh crore stemming from equity if market conditions remain favorable.
Atal Pension Yojana (APY) Review
During a recent review meeting of the Atal Pension Yojana (APY), Deepak Mohanty emphasised a substantial combined subscriber base of 7.5 crore for both NPS and APY. APY, tailored for low-income groups, has attracted 6 crore active subscribers, underscoring its popularity and accessibility. Meanwhile, NPS accounts for 1.5 crore subscribers. APY offers a guaranteed return of 9.2 per cent, contributing to its rapid expansion with 1.20 crore new subscribers added in the past year, a significant portion of whom are women. Notably, 85 per cent of APY subscribers contribute at least Rs 1000, reflecting widespread participation and financial inclusion efforts.
Initiatives for Expansion
Efforts are underway to raise awareness and expand coverage to informal sectors, allowing subscribers to increase their equity fund investments until age 45, thereby bolstering retirement savings. These initiatives are expected to roll out by September.
T+0H Scheme and Future Plans
Recently introduced T+0H scheme has received favorable responses by providing subscribers with the Net Asset Value (NAV) of the day they invest. Presently, 30 per cent of investments are utilising this scheme. Meanwhile, efforts towards establishing a Minimum Assured Plan are ongoing, although challenges beyond guarantee issues are slowing down its rollout.
Future Considerations
Despite a surge in interest due to the high 36 per cent returns, there are no immediate plans to alter the 75 per cent equity cap in NPS Tier 1, as it remains popular for its tax benefits. Subscribers seeking higher equity exposure can opt for Tier 2.
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NPS: The T+0H scheme, introduced in July, has received favorable responses by providing subscribers with the Net Asset Value (NAV) of the day they invest. Presently, 30 per cent of investments are utilizing this scheme. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
