The National Pension System (NPS) has achieved a significant milestone, with its assets under management (AUM), including the funds allocated to the Atal Pension Yojana (APY), reaching Rs 10 lakh crore on August 25, according to the Pension Fund Regulatory and Development Authority (PFRDA).
This achievement marks a remarkable 25 percent year-on-year growth from the Rs 8 lakh crore AUM recorded at the end of August in the previous fiscal year. As of March this year, the NPS AUM stood at Rs 8.98 lakh crore.
The NPS AUM would continue to grow and could reach anywhere between Rs 11 lakh crore to Rs 12 lakh crore by the end of the current fiscal year.
The NPS AUM had doubled from Rs 5 lakh crore to Rs 10 lakh crore in just two years and ten months. It took six years and six months to reach the Rs 1 lakh crore AUM milestone after its inception and an additional four years and eleven months to surpass Rs 5 lakh crore.
The sharp increase in overall AUM to the inclusion of the Corporate and All Citizen model, which added one million new subscribers. He anticipates further growth in corporate enrollment in NPS for their employees. Currently, there are 14,027 registered corporates in NPS, with 18.13 lakh subscribers, primarily dominated by public sector banks with over 5.20 lakh subscribers.
The total subscriber base, combining both corporate and all citizens models, has now reached 48.86 lakhs, with an AUM of Rs 1.82 lakh crore.
Equity performance
Strong market returns and the accumulation of assets have led to the phenomenal AUM growth. Both equity and debt markets performed well last year, with NPS historically delivering a 12.5 percent return on equity investments, reaching 13.41 percent in the past year.
Looking ahead, the contribution of NPS assets under management as a percentage of GDP to increase significantly in the coming years. Currently, NPS AUM, including APY, accounts for 3.6 percent of GDP, and as India’s per capita income continues to grow, this share is likely to rise.
The PFRDA plans to introduce a new feature, the Systematic Withdrawal Plan, in NPS in October or November this year. This feature will provide flexibility to NPS subscribers, allowing them to opt for systematic withdrawals post-retirement at various intervals (monthly, quarterly, half-yearly, and annually).
