Published: 18th Jan, 2024
Context
Chairman of the Pension Fund Regulatory & Development Authority (PFRDA) highlights the dominance of South India in National Pension System (NPS) enrolments.
Key Information
- During the current fiscal year, South India has emerged as the frontrunner in NPS private sector enrolments, encompassing both NPS Corporate and NPS All Citizen categories.
- The region contributes significantly, with 39% of enrolments in NPS Corporate and 29% in NPS All Citizen.
- Moreover, 36% of women participating in the NPS Corporate subscriber base hail from the Southern region, marking the highest percentage nationwide.
Need for Broadening Pension Awareness:
- Commendable increase in assets under management (AUM) from ?10 lakh crore to ?11 lakh crore between August 2023 and January 10, 2024.
- Still there is a vast untapped potential in the pension market.
- The pension assets to GDP ratio in India is currently 16.5%, compared to over 100% in developed countries.
- Lack of financial literacy and awareness about pension schemes, especially among women, remains a significant challenge.
Countrywide Scenario:
- Western countries adopt a three-tier retirement/pension scheme involving the government, employers, and individuals.
- In contrast, India lacks a mandatory pension plan for the majority of its population.
- Financial security requires proactive planning and investment.
- While women in India currently have only a 20 to 21% exposure to the NPS, their longer life expectancy makes pension planning crucial.
PFRDA Initiatives:
- PFRDA is working towards broadening the scope of the National Pension System and the Atal Pension Yojana.
- The focus is on reaching smaller communities, women, farmers, and small entrepreneurs.
- Recognizing India's youthful demographic and rising incomes, PFRDA aims to increase awareness through collaborations with intermediaries, financial advisors, and leveraging digital channels for efficient communication and enrollment.
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