India's pension regulator targets 30cr subscribers by 2030
What's the story
The Pension Fund Regulatory and Development Authority (PFRDA) has announced its ambitious plan to grow the National Pension System (NPS) and Atal Pension Yojana (APY) subscriber base to 30 crore by 2030. The target also includes a projected total assets under management (AUM) of ₹45 lakh crore. Currently, NPS and APY have around 8.6 crore subscribers with equity investments at nearly ₹3 lakh crore or 18% of total AUM.
Investment strategy
Chairperson clarifies on equity exposure
PFRDA Chairperson, Sivasubramanian Ramann, clarified that while 100% equity options will be offered for certain categories, equity's share is not expected to exceed one-third of total AUM. He stressed the importance of a balanced portfolio in long-term growth. "The concept of long-term growth is tied to diversification. In bad years for equity, government securities and corporate bonds cushion returns," Ramann said.
Workforce focus
Focus on gig and platform workers
A major part of PFRDA's growth strategy is to target the private and informal workforce, especially gig and platform workers. Ramann admitted that NPS has not been able to penetrate this segment deeply yet. "Platform workers are in a peculiar situation vis-a-vis existing financial products. It's our combined failing that we haven't reached them effectively yet," he said, adding that discussions are on with big digital platforms for seamless onboarding of their workforce.
New asset classes
Exploring new asset classes for pension funds
As part of its ongoing review of investment guidelines, PFRDA is considering new asset classes for pension funds, such as gold, silver, and unlisted investments through Alternative Investment Funds (AIFs). Despite these changes, the regulator has assured that NPS will remain a low-cost product."Our goal is very clear: we have to cover the country," Ramann said while stressing slightly higher distribution commissions to encourage wider reach.