Private sector fuels NPS boom, records 40.1% y-o-y growth at ₹2.47-lakh crore as of June 29

Driven by buoyant equity markets and an expanding NPS subscriber base in the private sector, National Pension System (NPS) assets, including those of APY, approached the ₹12.50-lakh crore mark as of June 29, latest PFRDA data showed.

This reflected a 28.64 percent year-on-year (YoY) growth over NPS AUM of ₹9.7-lakh crore as of July 1 last year. 

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 40.10 per cent year-on-year as on June 29 at ₹2.47-lakh crore. 

Also read

Budget wishlist: Life insurers push for NPS tax benefits on their pension and annuity products

AP Govt to disburse hiked welfare pensions on July 1

PFRDA eyeing 28% NPS assets growth for FY25 at ₹15-lakh crore, says Chairman Mohanty

The number of subscribers in private sector as of June 29 stood at 56.91 lakh, up 8.95 lakh on a Y-O-Y basis.

Meanwhile, Atal Pension Yojana (APY) assets touched ₹38,177 crore as of June 29, up 31.53 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 target is 1.3 crore.

Private sector growth this fiscal has been better across all schemes including APY. The private sector has been the 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 June 30 this fiscal stood at 1,95,857, PFRDA data showed.

PFRDA is now aiming to onboard about 11 lakh new NPS subscribers from private sector in 2024-25. In the previous fiscal, as many as 9.7 lakh private sector employees enrolled for NPS.

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.

ROBUST EQUITY RETURNS 

Roaring bull markets in equities has helped Pension Funds record a scorching average annual return of 35.79 percent as of June 28 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 18.74 percent in equities, with returns since NPS inception coming in at 14.12 percent for equity investments.

As of June 28, this year, corporate bonds recorded an annual return of 7.53 per cent, while government securities saw a return of 8.92 per cent. 

The annual return from Central and State government schemes stood at 11.62 per cent and 11.63 per cent, respectively, data showed.

The total number of NPS and APY subscribers as of June 29 this year stood at 7.55 crore, up 15.48 per cent over 6.54 crore a year ago.

BALANCE LIFE CYCLE SCHEME 

All eyes are now on the PFRDA as it is expected to in July-September roll out a new Balanced Life Cycle Scheme. 

This option — which is an improvement of existing LC50 (moderate life cycle fund) will be available for private sector under the automatic choice window. The new scheme will initially be allowed only for private sector NPS subscribers, but could be extended to the Government sector in the coming days.

Under the new scheme, the tapering will start from the age of 45 years. Till the age of 45 years the scheme will allocate 50 per cent of investments to equity and then gradually reduce as per the age of subscriber. The debt portion will be 50 percent till 45 years.

Currently, for those opting to existing LC 50, the investment towards equity is 50 percent and tapering begins at 35 years, he added. There will also be other benefits from the proposed new Balanced Life Cycle Fund.