NPS assets surge 27.85% y-o-y as of April 20 at ₹11.73 lakh crore

Aided by roaring equity markets, National Pension System (NPS) assets under management (AUM) recorded a robust 27.85 per cent y-o-y growth as of April 20 at ₹ 11.73 lakh crore (₹ 9.17 lakh crore), latest PFRDA data showed.

The overall AUM, including that of Atal Pension Yojana (APY), was flat compared to the end March 2024 level of ₹ 11.73 lakh crore. 

The number of new NPS and APY subscriber registrations in the first twenty days of this month stood at just 51,331, data showed.

On a y-o-y basis, the number of subscribers in the non-government sector as of April 20 grew by 8.75 lakh, while the increase in the government sector was just 7.11 lakh.

In 2023-24, as many as 9.47 lakh new subscribers onboarded NPS from the non-government sector. Of this 9.47 lakh new subscribers, as many as 8.10 lakh subscribers were from ‘all citizen model ‘ and 1.37 lakh were Corporate employees.

The overall robust NPS assets growth in recent years has been driven by both buoyant equity markets and widening NPS subscriber base as more working age Indians take up to retirement planning in a serious manner.

The non government sector —corporates and retail —saw a 38.88 percent year on year growth in its NPS assets as of April 20 this year to ₹ 2.27 lakh Crore. On the other hand, NPS assets of the government sector was up 25.35 percent at ₹ 9.04 lakh crore.

The number of new government employees who onboarded NPS in fiscal 2023-24 stood at 7.10 lakh. 

NPS asset growth in recent years has been propelled by heightened awareness campaign through various means run by industry participants and the regulator.

The pace of asset growth has been higher for non-government sector than those seen for government employees due to the higher allocation towards equity amongst the former category of subscribers.

Equity assets constitute around 18 per cent of the overall AUM while for the Retail and Corporate Segment it is relatively higher at around 40-45 percent of the AUM. 

Growth has ostensibly slowed down in the retail segment given the adoption of new tax regime by a number tax payers thus neutralising the tax benefits that NPS offers, according to industry insiders.

Over 3000 additional corporates had signed up for Corporate NPS for its employees in 2023-24.

EQUITY RETURNS SIZZLE 

Roaring bull markets in equities have helped Pension Funds record a scorching average annual return of 33.13 per cent as of April 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 18.80 per cent in equities, with returns since NPS inception coming in at 13.37 per cent for equity investments.

As of April 19 this year, Corporate Bonds recorded annual return of 7.53 per cent, while government securities saw a return of 7.96 percent. The annual return from central and state government schemes stood at 10.89 and 10.85 per cent respectively, data showed.

The total number of NPS and APY subscribers as of April 20 this year stood at 7.37 crore, up 16.31 per cent over 6.34 crore a year ago.

NPS took six years and six months to reach the milestone of ₹ 1 lakh crore AUM after its implementation in the year 2009. It then took 4 years and 11 months to further increase AUM to ₹ 5 lakh crore.  

NPS AUM had doubled to ₹ 10 lakh crore as of August 25 last year from ₹5 lakh crore in a span of just 2 years and ten months.

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