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15th January 2024 (9 Topics)

South India Takes Lead in NPS Enrolment Amidst Nationwide Challenges


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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