PFRDA source says pension AUM up 30% YoY at 13 trln rupees as of Sat
This story was originally published at 14:21 IST on 29 August 2024
Register to read our real-time news.Informist, Thursday, Aug 29, 2024
By Priyasmita Dutta
NEW DELHI – The total corpus of various schemes under the National Pension System and Atal Pension Yojana rose 30% on year to 13 trln rupees as of Saturday, a senior official at the Pension Fund Regulatory and Development Authority told Informist. The total number of subscribers under various pension schemes was 77 mln, including 58.5 mln subscribers under the Atal Pension Yojana. The corpus under Atal Pension Yojana was 397.5 bln rupees.
Of the total assets under management, 3.52 trln rupees belonged to central government employees, 6.43 trln rupees to state government employees, and 1.92 trln rupees to corporate employees as of Saturday, the regulator said. The asset under management for 'all citizens model' was nearly 675 bln rupees.
The average return on equity investment of the pension corpus since inception was 14.26% as of Saturday, while it was 8.84% on central government securities, and 9.52% and 9.10% on state government securities and corporate bonds, respectively.
The National Pension System is managed by 11 pension funds, including LIC Pension Fund Ltd, SBI Pension Funds Pvt Ltd, UTI Retirement Solutions Ltd, Tata Pension Management Ltd, Max Life Pension Fund Management Ltd and Axis Pension Fund Management Ltd and the latest added DSP Pension Fund Managers Ltd.
The PFRDA aims to achieve a total corpus of 15 trln rupees under the National Pension System in the current financial year ending March, Chairperson Deepak Mohanty had said on Jun 21.
This target may be achieved, but further growth of the corpus will be a tall task as majority of subscribers will likely shift to the government's newly announced Unified Pension Scheme.
Effective Apr 1, 2025, the Unified Pension Scheme aims to provide an assured pension, family pension, and assured minimum pension for government employees. To address the demand for assured returns, the Cabinet on Saturday decided that 50% of the average basic pay drawn in the last 12 months prior to superannuation for a minimum qualifying service of 25 years would be given as an assured pension. For those with less than 25 years but over 10 years of service, the assured sum would be a proportionate sum calculated on a pro-rata basis.
The second feature of the Unified Pension Scheme is assured family pension, under which 60% of the pension will be given to the immediate family after the demise of an employee. The third feature is an assured minimum pension, which is devised to address the issue of employees with government service for at least 10 years. Under this, 10,000 rupees will be given to such employees as a minimum assured pension.
While employees' contribution to the Unified Pension Scheme will continue to be at 10%, the Centre's contribution will be raised to 18.5% from 14%.
The Unified Pension Scheme can be adopted by states as and when they deem fit. Maharashtra has already announced implementation of the scheme a few hours after the Centre announced the scheme.
Going forward, central government employees will be given the option of choosing between the National Pension System and the Unified Pension Scheme, Cabinet Secretary T.V. Somanathan had said while announcing the plan, adding that the Unified Pension Scheme will be a beneficial plan for over 99% of employees.
The benefits of the Unified Pension Scheme will also be extended to all retired employees under the National Pension System from its inception--2004 up to Mar 31, 2025. In that case, they will get arrears for the past after adjusting the corpus that they have already withdrawn.
The government introduced the defined-contribution National Pension System on Jan 1, 2004, replacing the defined benefit pension scheme. All states, except Tamil Nadu and West Bengal, joined the new plan.
Under the old pension scheme, government employees who have completed at least 10 years of service receive a monthly guaranteed pension based on their last drawn basic salary and the years of service. Under this, the employees do not need to make a contribution.
The National Pension System is a market-linked annuity scheme in which individuals can invest a regular amount during employment and receive an annuity when they retire. Under the National Pension System, state government employees make a monthly contribution at the rate of 14% of their salary to the pension fund, and a matching contribution is paid by the state government. The system is administered and regulated by the PFRDA.
The pension system is mandatory for central government employees, while others can join it voluntarily. End
Edited by Deepshikha Bhardwaj
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2024. All rights reserved.
To read more please subscribe
Share this Story:
