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Due to the impact of the coronavirus pandemic and growing awareness about financial security, people are moving towards long-term investment avenues like the National Pension System (NPS). According to the latest numbers released by the Finance Ministry on May 26, the AUM of Pension Fund Regulatory and Development Authority (PFRDA) has grown by Rs 1 lakh crore in the past seven months. After 13 years of its launch, the total AUM has crossed the Rs 6-lakh crore mark.
Similarly, the total subscriber base has increased to 4.28 crore with 74.10 lakh government employees in the scheme and 28.37 lakh individuals joining from the non-government sector.
Subscribers show faith
“We feel immensely gratified at reaching this milestone of Rs 6 trillion AUM, and in less than seven months as we were at Rs 5 trillion in October 2020. The achievement shows the faith subscribers have in NPS and PFRDA. A growing realisation during this pandemic is the priority accorded by individuals to retirement planning, for preserving their financial well-being,” said Supratim Bandyopadhyay, Chairman, Pension Fund Regulatory and Development Authority (PFRDA).
PFRDA is the statutory authority established by an enactment of the Parliament, to regulate, promote and ensure orderly growth of NPS, APY and pension schemes.
“As of 21st May 2021, the total number of subscribers has crossed 4.28 crore and the Asset under Management (AUM) has grown to Rs 603,667.02 crore under the National Pension System (NPS) and Atal Pension Yojana (APY) schemes,” it said in a press release.
Retirement corpus building scheme
NPS is a voluntary retirement scheme where an individual makes contributions during her or his working life. The fund accumulated during working life is used for regular income after retirement. NPS is, however, mandatory for the Central Government employees with effect from 1st Jan 2004 which replaced the earlier defined benefit pension. One of its unique selling propositions is the fact that it is one of the lowest cost pension schemes in the world.
APY came into effect in June 2015, in order to create a universal social security system for all, especially the poor, underprivileged and workers in the unorganised sector.