Interview: Minimum assured return plan to launch this fiscal: PFRDA Chairman Deepak Mohanty

What is the update on plans to introduce a minimum assured return plan?

We are hoping to come out with something during the current financial year. That continues to be in the works because first we have to get a reasonable and satisfactory solution. Essentially, to manage the risk, there is a cost that the subscriber would have to bear and the return should be reasonable and attractive to the subscriber for people to come in.

What is your vision for NPS during your tenure?

When we put together the NPS and APY (Atal Pension Yojana), the numbers grew significantly. Now, we have about 6.7 crore subscribers, the numbers are largely driven by APY. If you speak of NPS, it is about 1.36 crore subscribers. The bulk of them are from the government. If you look at the private space, that is the corporate sector and the all citizens model also, where the common person, anybody for that matter, can subscribe.

What kind of expectations do you have from the private sector in NPS?

There is scope to expand NPS in the private sector. So we'll be making efforts on that side. In the private sector, we have over 14,000 corporates that have joined NPS, but the take-up rate by the employees is low. Only 18 lakh employees have joined so far. So our objective is to engage more with companies.

We are doing this through their trade bodies, for example, CII (Confederation of Indian Industry) and FICCI (Federation of Indian Chambers of Commerce and Industry), and organising meetings. We are also getting in direct touch with the companies and their HR departments, apart from increasing employee awareness, so a lot of different programmes.

How is NPS doing among public sector undertakings?

There are 200-odd central public sector undertakings out of which 69 have joined NPS. Our objective would be to bring those remaining to NPS, for which we are engaging with them. And we're expanding the intermediary space because NPS is something you don't have to be a salaried employee to join.

What are your targets for this financial year and next?

If you see that NPS in the private sector, we got 10 lakh new subscribers coming in last year. The private sector means the corporate sector and the all citizens model. Our target is to add 13 lakh more NPS subscribers in FY24.

What efforts are you making to take NPS to the people?

Anybody can join the NPS and there is a large untapped potential, you know, professionals, self-employed, small businesses and so on. We are also targeting them. For that, we have expanded the intermediary space. Earlier, for example, RRBs (regional rural banks) were only doing APY, but now we are enabling them to do NPS. That way NPS would be accessible in rural and semi-urban areas through physical mode, somebody goes and talks to them.

It is already available online to everybody. So that is another thing that we are doing. Apart from that, for NPS particularly, we are increasing the communication outreach through digital media, print media and social media.

How do you see India’s retirement landscape and pension reforms?

The potential is huge in India in the pension sector because we are the most populous country with a young population. If there are more young people, that is favourable for accumulation. One really would have to tap into that process, but a survey done by NCFE (National Centre for Financial Education) suggests that even among the employed, only 23 percent are planning for retirement with at least some retirement savings. But that number is inadequate.

That's why we are also scaling up the digital outreach process so that we reach the younger audience, and tell them they should prepare for retirement planning, should start early. We are trying to create an enabling environment and increase awareness.