10.3 million new subscribers added in FY24
The assets under management (AUM) under the National Pension System (NPS) including Atal Pension Yojana rose by 30.5% on year to Rs 11.73 trillion as of March 31, aided by new enrolment of 10.3 million new subscribers, according to the Pension Fund and Regulatory Development Authority data.
Despite saturation in enrolment of government employees, the subscriber base under NPS rose by 16% on year to 73.6 million. The net invested contribution amount rose to Rs 8.1 trillion as of March 31, 2024, an annual increase of 22%.
The average returns generated by pension funds under NPS have been handsome as well. Equities have given a return of 35.42% in one year and 13.48% since inception. The central government scheme and the state government schemes have given a return of around 12.5% in one year and around 9.5% since inception.
A few states that have issued a notification to pull out of the NPS to revert to the old defined pension system (OPS) continued to contribute to the NPS irrespective of the on-paper withdrawal.
With the government sector saturated, PFRDA is making efforts to rope in corporates to enrol their staff under NPS.
As against the target of 1.3 million new private sector subscriber enrolments in FY24, nearly 0.95 million has been achieved.
According to the extant NPS norms, a maximum of 60% of the accumulated NPS corpus from contributions during a person’s working years is allowed to be withdrawn tax-free at the time of retirement. The subscriber has to invest a minimum of 40% of the corpus in annuities for a regular pension. However, it is not a guaranteed pension as returns are linked to markets. Annuities could fetch 5% to 7% return per annum depending on the choices made by the subscriber with single-life annuities giving higher returns as the corpus is not returned by the fund manager after the death of the pensioner.
Given that the NPS system is giving good returns, the NPS subscribers can stay invested in the NPS till they turn 75 years under the Systematic Withdrawal Plan (SWP) and draw monthly or quarterly or annual basis depending on their requirements.
Source:financialexpress.com