The Pension Fund Regulatory and Development Authority (PFRDA) held a webinar to create awareness about retirement planning through National Pension System (NPS). The webinar titled “Securing retirement with NPS and Insights for Employers” was organised in association with the Confederation of Indian Industry (CII) Mumbai chapter.
Delivering his keynote address in the presence of leading Indian corporates, PFRDA Chairman Shri Supratim Bandyopadhyay said: “Pension should be widely discussed. Young people do not want to discuss it since they think it’s something they will encounter 30-40 years later. But unless one thinks of pension at an early age, he/she cannot create a good corpus for one’s post-retirement life.”
“India’s population will surpass China’s by 2027. We will become the most populous country. Also, India’s population is ageing and longevity is also increasing. The average age in India now is 69 years, and when a person reaches 60 years, he lives for another 18-20 years. This is not only the case in India but also in other developed nations. All these uncertainties call for urgent action in retirement planning,” the PFRDA Chairman observed.
The pension sector in India is fragmented. There are many retirement benefit schemes available and we need to enroll in any of these schemes to ensure income at old age. Upon superannuation, expenditure remains the same, but income reduces. NPS provides protection in such situations as a certain portion of the accumulated corpus is annuitized, which ensures a steady flow of income.
Expenses after retirement – majorly medical and inflation impact – need to be taken care of at the beginning of one’s career when a person starts earning, he noted. Only 3-4% of the entire target population is under NPS. Therefore, employers have to go a long way in convincing their employees to enrol under the scheme.
“NPS has certain advantages along with income tax benefits and has been delivering decent rate of return. In terms of cost-efficiency, it is unbeaten. It is the lowest cost scheme in India, and comparatively the least cost pension scheme, world over,” Shri Bandyopadhyay concluded.
The total number of NPS and APY subscribers as of 28th August 2021 is 452.71 lakh and the total assets under management (AUM) are Rs 642,829 lakh crore.