Press Information Bureau
Government Of India
Ministry Of Finance
Government Of India
Ministry Of Finance
15-Sep-2017
Conference on Portability from
Superannuation and Recognized Provident Funds to National Pension System
(NPS); NPS has more than 1.71 crore subscribers with total Asset under
Management (AUM) of more than Rs. 2.04 lakh crores.
A Conference on Portability from
Superannuation and recognized Provident Funds to National Pension System
(NPS) was organized by the Pension Fund Regulatory and Development
Authority (PFRDA) in coordination with Willis Towers Watson in national
capital. The Prime objective of the Conference was to provide a
knowledge base platform to the Corporate by providing solutions to
address the issues / challenges of portability of superannuation funds
to NPS.
160 participants comprising Corporate,
Points of Presence (POPs), Pension Funds, Central Record Keeping
Agencies (CRAs) participated in the Conference.
Dr. B. S. Bhandari, Whole Time Member
(Economics), PFRDA, highlighted the need to expand the coverage of NPS
in an efficient and sustainable way. He asserted the fact that there are
more employees in the Corporate – Private sector than in the government
sector and hence there is a great potential for NPS in the corporate
sector. PFRDA has been constantly engaging with its stake holders in the
NPS and has been working with industry associations for promotion of
NPS in the Corporate – Private sector. To make NPS entry easy and the
interface user friendly, various modifications have been carried out in
the product.
Shri Rohit Jain, Head, Willis Towers
Watson (India), speaking on the occasion, told that the average life
expectancy of persons in India has risen and hence there is a greater
need for a retirement / pension product for all. Traditional pension
products cover only 30% of the population. In this changing scenario
there is a latent demand for product like NPS as there is no universal
pension product.
Shri Hemant Contractor, Chairman, PFRDA
in his key note address, informed that, earlier, people used to retire
from the same job not only in the government sector but also in private
sector. With opening up of economy people started getting more job
opportunities switching jobs suitable to their skills and talents. Job
switching has become more frequent and people seek more controls on
their finances, when they start moving jobs and place from one to
another. The concept of portability came in and people started thinking
about having better control on their retirement savings.
Defined Benefit Pension schemes, which
were predominant, became unsustainable not only for the government
sector but also for the private sector because of various factors. A
Defined Contribution scheme was therefore launched in 2004 which was
initially only for Central Government employees, but which was later
extended to State Government employees and later to the private sector.
This scheme is the National Pension System (NPS), which is regulated by
PFRDA.
NPS addressed the concerns of
subscribers relating to portability and freedom of choice, and gradually
started to pick up momentum in the private sector. The other features
of NPS, namely, low cost, attractive returns, transparency, flexibility
and domain expertise in each area of pension activity were the other
factors which appealed to the private sector. Innovations and changes
are made from time to time in the NPS product and processes, some recent
examples being, introduction of two new life cycle funds, inclusion of
alternative assets in investment portfolio, online entry and exit etc.
The entry age to NPS is now proposed to
be increased to 65 years from 60 years and there is an option to
continue up to age of 70 years.
The Chairman also mentioned that NPS
should also be explored, as an additional retirement benefit, for
corporates where superannuation funds are not available and employees
are covered only under the mandatory EPFO schemes.
He highlighted the growth of 47% in AUM
and 26% in number of subscribers in the last financial year (2016-17).
He also made a reference to Atal Pension Yojana, the pension platform
available for unorganized segment through Government of India / PFRDA
and its year on year growth indicating the underlying demand for pension
products in India.
During the conference, a panel
discussion comprising industry experts such as Willis Towers Watson,
HDFC Pension Funds, Siemens Limited, Vedanta Group and NSDL e-Governance
Infrastructure Limited eyeing the opportunities, addressing the
challenges / issues and preparation of necessary guidelines on
superannuation funds and NPS portability was conducted.
In the second half, a Conference for Point of Presence (PoPs), the distribution channel for NPS, was conducted.
Shri Hemant Contractor, Chairman, PFRDA,
in his keynote address stressed on the need for robust distribution of
the NPS through the current distribution network being managed by POPs
which are Banks and other financial institutions. He also laid emphasis
on the fact that, the key to last mile connectivity is increased
distribution network by the POPs by registration and activation of more
branches and through awareness campaigns. He informed that PFRDA has
empanelled IL&FS Skill Development Corporation Limited as its
training agency to impart training on NPS to POPs and Corporate and
urged the POPs to utilise the services of the Training Agency for
training of their staff member on NPS.
During this conference, awards were distributed to the POPs, for their performance in FY 2016-17 under various categories.
Currently, NPS has more than 1.71 crore subscribers with total Asset under Management (AUM) of more than Rs. 2.04 lakh crores.
Source: PIB