Buoyant equity markets and a growing subscriber base in the non-government sector have propelled National Pension System (NPS) assets to ₹12.69 lakh crore as of July 20, marking a 28.33 per cent year-on-year increase, according to the latest PFRDA data.
A strong-showing from the private sector had helped NPS assets record a robust 30.5 per cent YoY growth in 2023-24 to touch ₹11.73 lakh crore as of end March 2024.
In fact, private sector NPS assets grew whopping 39.62 per cent year-on-year as on July 20, 2024, at ₹2.52 lakh crore.
The number of subscribers in private sector as of July 20 stood at 57.44 lakh, up 9.12 lakh on a Y-O-Y basis.
Meanwhile, Atal Pension Yojana (APY) assets touched ₹38,827 crore as of July 20, up 31.03 per cent year-on-year basis.
The Pension Fund Regulatory & Development Authority (PFRDA) had onboarded 1.2 crore APY subscribers in 2023-24. This fiscal the target is 1.3 crore. So far, this fiscal the net addition in APY subscriber base stood at about 20 lakh.
Private sector growth this fiscal has been better across all schemes including APY.
Private sector has been key reason behind NPS assets’ sharp increase in recent years.
PFRDA Chairman Deepak Mohanty had recently said the pension regulator is targeting overall NPS Assets of ₹15 lakh crore by end March 2025.
The number of new NPS and APY subscriber registrations till July 23 this fiscal stood at 2,58,957, PFRDA data showed.
PFRDA is now aiming to onboard about 11 lakh new NPS subscribers from private sector in 2024-25. In previous fiscal, as many as 9.7 lakh private sector employees enrolled for NPS. Till July 22 this fiscal, the net addition of Private sector subscribers stood at 2.32 lakh.
The rapid growth of overall NPS assets is evident as the AUM was only about ₹ 1 lakh crore in 2015. NPS assets had reached the ₹10 lakh crore mark in August last year.
STRONG EQUITY RETURNS
Roaring bull markets in equities has helped pension funds record a robust average annual return of 32.50 per cent as of July 19, surpassing corporate bonds by over fourfold, and outperforming government securities and State government schemes, latest PFRDA data showed.
Over the past three years, pension funds achieved an average return of 19.34 per cent in equities, with returns since NPS inception coming in at 14.21 per cent for equity investments.
As of July 19 this year, corporate bonds recorded annual return of 7.70 per cent, while government securities saw a return of 9.10 per cent.
The annual return from Central and State government schemes stood at 11.33 per cent and 11.41 per cent, respectively, data showed.
The total number of NPS and APY subscribers as of June 29 this year stood at 7.60 crore, up 16.73 per cent over 6.51 crore a year ago.
BUDGET PROPOSALS
The just announced Budget 2024-25 has sweetened the deal for both employers and employees in the non-government sector, rewarding them with increased tax deduction on their NPS contributions.
The deduction of expenditure by employers towards NPS is proposed to be increased from 10 percent to 14 percent of the employee’s salary. Similarly, deduction of this expenditure up to 14 percent of salary from the income of employees in private sector, public sector banks and undertakings, opting for the new tax regime, is proposed to be provided, Finance & Corporate Affairs Minister Nirmala Sitharaman had announced in her Budget speech.
NPS FOR MINORS
Sitharaman had also announced the launch of NPS-Vatsalya, a plan for contribution by parents and guardians for minors will be started. On attaining the age of majority, the plan can be converted seamlessly into a normal NPS account.