MUMBAI: Increased awareness about financial security helped by strong promotion by the government has helped assets under the National Pension System (NPS) to more than double in two years to nearly ₹1.20 lakh crore, with the number of subscribers rising more than 50% to10 million as on May 2016.
Two years ago, the asset under management (AUM)— jargon for the value of all assets under a scheme—of the NPS stood at a little over ₹48,000 crore while the number of subscribers was 6.5 million.
NPS, launched in 2004, is a voluntary, defined-contribution retirement savings pool, which has been described by the government as a sustainable solution for adequate retirement income to every citizen.
The NPS has five schemes — one each for employees of the Central government, the state government and the unorganised private corporate sector.
The other two being the NPS-Lite Swavalambhan and the Atal Pension Yojna (APY), which garnered a total AUM of about ₹692 crore till May 31, 2016.
In mid-June, the government also allowed non-resident Indians (NRIs) to open NPS accounts online if they have Aadhaar Card or PAN card.
However, the Reserve Bank of India has said more needs to be done. In its recent financial stability report, the RBI pointed out that “limited education about financial savings and the lack of retirement planning outlook pose a challenge in increasing the penetration of voluntary pension schemes.
{{/usCountry}}However, the Reserve Bank of India has said more needs to be done. In its recent financial stability report, the RBI pointed out that “limited education about financial savings and the lack of retirement planning outlook pose a challenge in increasing the penetration of voluntary pension schemes.
{{/usCountry}}Retirement planning in the organised sector in India has so far been broadly guided by the objectives of saving income tax and generating guaranteed returns .”