PFRDA expects pension assets to surpass ₹11-lakh crore by March next
pension organizer PFRDA It is confident that the pension assets it oversees will comfortably exceed Rs 11 million crore on the back of buoyant equity markets and increasing appetite for pension coverage.
This will be 22.5 per cent higher than the ₹8.98 crore on record as of 31st March 2023.
As of July 8, pension assets (NPS and APY combined AUM) were ₹9.76 lakh crores, up 28.9 per cent over INR 7.57 crores as of July 9 last year.
“The actual accumulation (pension assets) depends on the condition of the market, so it could definitely be more than ₹ 11-lakh crores (by the end of this financial year). It all depends on the performance of the market,” said Deepak Mohanty, Chairman of PFRDA, here on Tuesday. Stocks and how interest rates behave.
Right now, the markets are doing pretty well, so the backlog is pretty good as well. I’m confident the way the numbers are growing, the way the market is behaving, we should see good growth in the group.”
PFRDA President said the assets AUM of NPS It is now approaching INR 9.8 crore and will soon cross INR 10 crore.
The rally in stock markets in the past two and a half months, along with the decline in G-sec prices, has boosted the total assets under management of the market-related NPS and APY.
The NPS Equity Scheme over the past year has given an average return of 21.98 percent (average 7 PFS), driving the growth of NPS assets. The authority’s latest data showed that, over the past three years, the average return under the stock plan was 22.86 percent.
Continued strong response from the non-government sector – both retail and corporate segments – in terms of new subscribers (more than 1 million subscribers added in the last 12 months) to this premium offering has also helped the total assets under management grow by around 30 percent.
subscribers on board
In the past fiscal year, the authority achieved a remarkable achievement in accommodating up to 10,000 new subscribers from the private sector. In the current public finances, the Pensions Regulatory Authority is targeting 13,000 new subscribers in the private sector.
The continued strong performance of NPS is also some indication that young investors are showing a preference for market-related investments over fixed-return vehicles.
After growing at a strong compound annual growth rate (CAGR) averaging 28 percent in the past few years, total assets under management saw a sharp decline to a growth level of 22 percent in 2022-23 due to global headwinds such as geopolitical tensions. Interest rate hike by the US Federal Reserve and also due to domestic developments such as the Reserve Bank of India (RBI) move to raise interest rates.
However, the latest PFRDA data (as of July 8) shows that NPS asset growth has returned to pre-pandemic levels.