Riding on the bullish momentum in Indian equities market and increased interest in the non-government sector for pension cover, the country’s pension assets (NPS and APY) in aggregate recorded a robust 27 percent year-on-year growth in assets under management (AUM) as of August 5 at ₹9.92-lakh crore, latest PFRDA data showed.

The aggregate pension assets regulated by PFRDA stood at ₹7.80-lakh crore a year ago.

Equity scheme of NPS has over the last one year given an average return of 15.26 per cent (average of 7 PFS), which has fuelled NPS assets growth.  For the last three years, the average return under equity scheme stood at 22.20 per cent, the latest PFRDA data showed.

While the NPS equity scheme recorded a robust 15.26 per cent return y-o-y as of August 5, the average return on corporate bonds was 7.02 per cent, and 7.89 per cent for government securities.

The average returns generated by the pension funds in the Central government scheme stood at 8.73 per cent. In the case of State government scheme, the pension funds generated an average returns of 8.70 percent. 

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The continued strong response from the non-government sector — individuals and corporate sector categories — in terms of new subscribers (nearly a million added in last twelve months) has also aided this stellar show in overall AUM growth of near 30 per cent.

Both the corporate and all-citizens model saw an AUM growth of whopping 36 per cent each on a y-o-y basis as of August 5 to touch ₹35,290 crore and ₹ 12,630 crore, respectively. Both the corporate and all citizen models have onboarded nearly a million new subscribers between August 6 last year and August 5 this year.

Last fiscal, PFRDA achieved a milestone of onboarding as many as 10 lakh new private sector subscribers. In current fiscal, the pension regulator is aiming at 13 lakh new private sector subscribers.

PFRDA Chairman Deepak Mohanty had recently said that the pension regulator is confident that pension assets overseen by it will comfortably surpass ₹11-lakh crore this fiscal on the back of buoyant equity markets and increased appetite for pension cover.

The continued strong performance of NPS is also an indication of young investors’ preference for market-linked investments over fixed return vehicles.

After growing at robust compounded annual growth rate (CAGR) of an average 28 per cent in the last few years, the overall AUM saw sharp decline to growth level of 22 per cent in 2022-23 largely due to global headwinds such as geo political tensions and hike in interest rates by the central banks, including the US Fed and Reserve Bank of India.

However, the latest PFRDA data (as of August 5) showed that NPS assets growth may well and truly returned to the pre-pandemic levels. 

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