Asserting that pension assets will continue to show strong growth despite volatility in the equity and debt markets, Pension Fund Regulatory and Development Authority (PFRDA) Chairman Supratim Bandyopadhyay on Friday said he expects pension assets under management (AUM) to cross ₹5-lakh-crore by the end of September.
Pension assets, estimated at ₹4.85-lakh crore, are expected to continue to grow at over 30 per cent in the current fiscal also, Bandyopadhyay said at FICCI’s flagship conference, FINCON.
“The asset base is growing at 34 per cent year-on-year (YoY). This year also we will see the same kind of growth. Asset quality is very robust despite the events and downgrades we have seen in the market. Our overall gross NPA is just about 0.3 per cent and net NPA is zero,” he said. So far this fiscal, pension assets have grown 16.5 per cent YoY.
Bandyopadhyay also highlighted that despite the lockdown, more than two million customers have joined the Atal Pension Yojana this fiscal.
NPS returns
As regards returns on the National Pension System (NPS), he said the NPS-equity scheme saw an 11-year compounded annual growth of 9.09 per cent. For the corporate bond scheme and government securities scheme, the returns were 10.64 per cent and 10.41 per cent, respectively.
The PFRDA is in talks with consultants about launching a product with minimum assured returns, Bandyopadhyay said. He added that he sees a lot of changes coming in annuity products and, therefore, the PFRDA will work with the insurance industry to ensure everyone in the country has some pension coverage.
In a month, the PFRDA will also introduce a direct remittance scheme where somebody who is ready to contribute by 9.30 am will get the NAV by the end of the day, as one gets in mutual funds, he said. Now, it would take two days.
Bandyopadhyay noted that India still had a long way to go in terms of pension coverage. The Mercer Global Pension Index 2019 had ranked India 32nd out of 37 countries.