Asset under management of NPS and APY crosses milestone of Rs 10 lakh crore

NPS is a defined contribution pension scheme which was first introduced on January 1, 2004.

Asset under management of National Pension System (NPS) and Atal Pension Yojana (APY) has crossed a milestone of Rs 10 lakh crore, Pension Fund Regulatory and Development Authority (PFRDA) Chairman Deepak Mohanty said on Friday.

The landmark AUM was reached on August 23 and it took two years and 10 months to double from Rs 5 lakh crore.

Of the total, AUM under APY stood at Rs 30,051 crore at the end of August 25 while the figure for NPS Lite reached Rs 5,157 crore.

The number of subscribers under the National Pension System (NPS) and Atal Pension Yojana (APY) together increased to more than 6.62 crore.

The National Pension System (NPS) has been implemented for all government employees (except armed forces) joining central government on or after January 1 2004. Most of the state/UT governments have also notified the National Pension System (NPS) for their new employees.

NPS has been made available to every Indian citizen from May 1 2009 on a voluntary basis. Further, from June 1, 2015, the APY has been launched.

Pension fund regulator PFRDA plans to come out with a systematic withdrawal plan which will provide flexibility to pension account holders to withdraw a lump sum fund as per their choice on completion of 60 years.

"It is at a very advanced stage. Hopefully, it should be implemented from October and November," Mohanty said.

Currently, National Pension Scheme (NPS) subscribers after turning 60 years withdraw up to 60 per cent of the retirement corpus as a lump sum while the remaining 40 per cent of the corpus mandatorily goes into buying an annuity.

However, a systematic withdrawal plan will allow NPS subscribers to opt for periodic withdrawal — either monthly, quarterly, half-yearly, or annually – till the age of 75 years.

PFRDA increased the entry age up to 70 and the exit age to 75 keeping in view longevity.

PFRDA has taken various steps to enhance financial education, empowering subscribers to make well-informed decisions and leverage the advantages of the formal financial sector while maintaining a clear understanding of associated risks and trade-offs, he said.

In pursuit of the objective to promote pension and retirement planning, he said, PFRDA annually celebrates October 1 as National Pension System Diwas (NPS Diwas).

This initiative contributes to the financial self-sufficiency of Indian citizens in their post-retirement phase, he said.

In observance of NPS Diwas this year, he said, PFRDA has planned a month-long sequence of digital media and publicity initiatives.

These endeavours are strategically designed to commemorate NPS Diwas and effectively communicate the importance of pension planning to the subscribers as well as to the general public, he said.