The Pension Fund Regulatory and Development Authority (PFRDA) expects the assets under management (AUM) of the National Pension Scheme (NPS) to touch ₹5-lakh crore by the end of this month.

According to Supratim Bandyopadhyay, Chairperson, PFRDA, the contribution flow into pension scheme has not just remained intact, but has witnessed a growth of 23-24 per cent during April-August 2020 despite the pandemic.

“Despite the volatile conditions, our AUM has grown by nearly 18-19 per cent from April to August, and given the rate at which we are growing, we hope to be able to reach an AUM of ₹5-lakh crore soon,” said Bandyopadhyay at the 13th banking colloquium organised by CII on Tuesday.

Pension assets in India have been growing at a CAGR of around 30-35 per cent over the last few years. However, the relative size of India’s pension assets to the GDP was considerably lower when compared to other economies and, hence, there was still a long way to go and a large gap to be covered.

“Pension assets versus GDP, including employees’ provident fund, public provident fund, everything taken together, that also contributes only 10 per cent of the country’s total GDP. This is in stark contrast to some of the OECD countries, where the relative size of pension assets to the GDP is as high as 60 per cent,” he said.

Talking about the need for pension, he said while mortality experience has been improving, however, improvements in the quality of life have not kept pace, thereby leading to a disproportionate increase in costs, particularly towards medical expenses.

To bring more people under the fold, PFRDA is looking to cover building and construction workers, and is also looking to reach out to micro and small scale industries.

A growth in pension funds corpus would aid in infrastructure development of the country as it can be utilised for funding infrastructure projects, he added.

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