Assets Under Management Cross INR 1 Lakh Crore Barrier Under NPS
All Central Government employees who were hired on January 1, 2004 or later were brought under National Pension Scheme or NPS. Only Indian Armed Forces personnel were not included in NPS. Even Union Territory and State Governments included their new employees under the scheme. Later, on May 1, 2009, NPS doors were opened for all citizens of India who voluntarily wanted to join NPS. Then came the flagship pension scheme of current central government by the name Atal Pension Yojana. Launched on June 1, 2015, this social security scheme gave a massive thrust to all existing social security schemes of central government. Together with APY, the NPS together amassed a massive amount of wealth that is currently managed under NPS. The total AUM or Assets Under Management stands at INR 100,275 Crores as on 3rd of October, 2015.
The amount of money that has been pooled from different places are broken down and show in the table below:
|Segment from which money is collected||Number of subscribers in the segment||AUM calculated in Crores|
|Central Government Employees||1,571,136||42,381|
|State and UT Government Employees||2,774,459||47,974|
|Private Sector Employees Under NPS||524,143||7,943|
|Subscribers of Swavalamban and NPS-Lite||4,467,733||1,865|
|APY or Atal Pension Yojana||794,467||112|
In order to make NPS a more pro-user scheme, PFRDA or Pension Fund Regulatory and Development Authority took several steps those were implemented both on policy level and operational level. More tax benefits were included, which was the primary card for luring in customers. These tax benefits can be availed only and only under National Pension Scheme. Because of these NPS-exclusive tax benefits, the government is hopeful that subscribers under NPS will grow massively by March 2016 when fiscal year 2015-2016 comes to an end.
All pro-subscriber measures which were implemented by PFRDA during recent past are summed up below:
- More investment avenues were included under NPS so that investment spectrum increases and returns are optimized.
- Subscribers were allowed to withdraw up to 25% of the total investments they make so that the money can be used for purposes like marriage of eligible children, children’s higher education, covering medical expenses for specified ailments, house construction etc. However, such withdrawal is allowed only after NPS has been running for a minimum of 10 years.
- Employees from private sector who subscribe for NPS can now keep contributing till the age of 70 as against 60 that was previously set.
- When the subscriber reaches the age of 60 or when the superannuation date is achieved, NPS subscribers are free to defer annuity purchase by a maximum of 3 years or defer lump sum withdrawal until they reach 70 years of age. The funds will stay in the NPS system for the deferred duration.
- Transaction statements now include returns for individual subscribers since the date when the NPS account was opened. The statements additional include the details of the returns that were generated in last fiscal year.
- Government subscribers those who want to avail additional tax benefits under NPS need to deposit additional 50,000 rupees voluntarily. These deposits are to be made through POP-SP and go in Tier I account of subscribers. Those government employees who are not under NPS but covered by old pension scheme are also eligible for these additional tax benefits. These employees are however required to open Tier I account and then contribute. Account opening and contribution deposits take place through POP-SP.
- NPS subscribers can use online interface to change information like mobile number, email ID etc. They can also use the online interface for changing password.
- Subscribers get quarterly SMS alerts about total NPS balance. They also receive monthly SMS alert for their contributions and if any changes are made in PRAN.