Intermediaries must work to expand NPS subscriber base, says PFRDA Chief Mohanty

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Pension funds and Points of Presence (PoPs) must up their game in spreading awareness about NPS and look to expand the base of subscribers, PFRDA Chairman Deepak Mohanty has said. 

They should work towards increasing pension awareness both through digital outreach and in physical form, Mohanty said at an event to mark HDFC Pension Fund crossing the milestone of ₹50,000 crore of pension assets under its management.

He pointed out that PFRDA had already permitted the PoPs to utilise the services of agents for NPS which should facilitate physical reach. 

Mohanty underscored the need for everyone to have a pension account. Considering their higher longevity, women in the family must have a pension account. The belief that a single post-retirement account for the head of the family is sufficient for the family is somewhat misplaced, he noted. 

Mohanty highlighted that Survey data suggest that those who can financially afford to have National Pension System (NPS) are still not adequately covered. “For example inclusion of women is less. Similarly, spread of NPS among professionals, small business and self employed is relatively less”, he said. 

WOO YOUNGSTERS 

Mohanty urged pension funds and PoPs to enable youngsters to come under the NPS fold. “NPS is going to expand as income levels rise and awareness improves. However, pension is not a natural pick by youngsters. There is a need for enablement. 

As a regulator, we have made NPS fully digitally accessible, the scheme flexible, low cost with a lower threshold of entry. It is necessary for intermediaries to reach out to the potential customer base”, he said. 

CORPORATE EMPLOYEES 

Mohanty noted that over 13,500 corporates have joined NPS, but the take up rate with employees, though increasing, is slow. The number of corporate employees in NPS between March 2019 and August 2023 have increased from 8 lakh to 18 lakh.

There is scope for larger number of corporate employees joining NPS with greater awareness and facilitation where pension funds have an important role to play, Mohanty added.