Minimum assured return scheme in the offing, but not immediately: PFRDA chief

New, balanced lifecycle scheme to be introduced under NPS

The proposed minimum assured return scheme (MARS) under the National Pension System (NPS), which has been in the works for a while, is likely to take longer to materialise.

“The minimum assured return plan has taken a backseat for now,” Deepak Mohanty, Chairman, Pension Regulatory and Development Authority of India (PFRDA), said while speaking at a media conference in Mumbai.

“I cannot put a timeline to it. When we come closer to its completion, maybe then we can target a timeline,” Mohanty had told Moneycontrol in June.

Also read: New NPS scheme to be launched in July-Aug, says PFRDA chairman

However, the authority aims to roll out a new scheme – balanced lifecycle plan – by September this year. Under this plan, the debt proportion will increase after 45 years of age. Existing NPS subscribers will also be allowed to move to the new scheme, he said. All pension funds will provide the new NPS balance lifecycle scheme.

Also, the authority has no immediate plans to introduce a systematic transfer plan in lieu of the existing framework where 40 percent of the NPS corpus at the age of vesting has to be mandatorily used to purchase annuities, that is, pension income for life. “This will require an amendment in our statute,” he said.

NPS AUM stood at Rs 12.5 lakh crore in March 2024 and the PFRDA expects the AUM to cross Rs 15 lakh crore by end of FY 2024-25. Active NPS subscriber base crosses 7.5 crore, over 11 lakh voluntary subscribers likely to be added this year.

Also read: How your employer's contribution to your NPS can reduce your tax outgo

Voluntary NPS plans – corporate and all-citizen-models – added over 9.7 lakh new subscribers in 2023-24 and this figure is expected to go up to 11 lakh in 2024-25, the pension regulator has said.

The total subscriber base under non-government schemes has grown to 7.5 crore, while the total assets under management (AUM) have grown to Rs 12.5 lakh crore last financial year, Mohanty said.

The pension regulator hopes to enroll 1.3 crore new APY (Atal Pension Yojana) subscribers in FY 2024-25 after adding 1.22 crore members in 2023-24.

Plans are also afoot to boost financial literacy and increase participation from the informal sector, professionals as also home-makers, who do not earn any income, but will need pension in their silver years.