Thanks to the joint efforts of the government and the pension fund regulator, the assets of National Pension System (NPS) have reached closer to Rs. 2 lakh, says PFRDA.
The total AUM of NPS witnessed a significant growth of over 67% from Rs. 1.18 lakh crore in FY 2015-16 to Rs.1.98 lakh crore as per latest data. Similarly, the number of subscribers increased by a whopping 71% in the corresponding period from 97.5 lakh in FY 2015-16 to 1.66 crore in FY 2016-17.
Speaking at a recent industry event, Hemant Contractor, Chairman, PFRDA, attributed the growth to continuous efforts of the government to increase pension penetration in the country. He also believes, that the subscriber base as well as the investment corpus of NPS would go up this year building on the growth they had registered last fiscal year as pension products get more popular amongst investors.
Currently, the pension coverage is about 16% of the working population. Speaking about the low pension coverage he added, “According to a study, the projected population of elderly citizens will reach about 18 crore by 2026. However, the demand for pension products has been flat all this time which is why we are launching more awareness campaigns across the country to promote NPS.”
To expand the distribution footprint, PFRDA has allowed IFAs to add retirement products to their investment gamut. However, the response of retirement advisors has not been up to the mark as there were very few takers. Contractor said, “There have been just 35 IFAs registered as retirement advisors with us so far.”
PFRDA has asked NISM and FPSB to encourage professionals to become retirement advisors. Advisors can cross-sell NPS to their existing clients. Intermediaries registered with SEBI and IRDAI can also consider adding NPS to their offerings to grow business.
