Pension regulator PFRDA 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.

This will be  22.5 per cent higher than ₹8.98-lakh crore recorded as of March 31, 2023.

As of July 8, the pension assets (NPS and APY combined AUM) stood at ₹9.76 lakh crore, up 28.9 per cent over ₹7.57 lakh crore as of July 9 last year.

“The actual accumulation (pension assets AUM) depends on market condition, so it could be certainly more than ₹11-lakh crore (by the end of this financial year). But it all depends on equity market performance and how interest rates behave,” Deepak Mohanty , Chairman, PFRDA, said here on Tuesday.

“Right now markets are doing well, so accumulation is also quite good. I am confident the way the numbers are growing, the way market is behaving we should see good growth in the corpus”.

The PFRDA Chairman said AUM of NPS is now close to ₹9.8-lakh crore and would very soon cross ₹10- lakh crore. 

An equity markets rally in the last two-and-a-half months, coupled with a fall in G-sec rates, has bolstered the overall assets under management of the market-linked National NPS and APY.

Equity scheme of NPS has over the last one year given an average return of 21.98 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 22.86 per cent, the latest PFRDA data showed.

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

Onboarding subscribers

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.

The continued strong performance of NPS is also some indication that young investors are showing 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 US Fed and also owing to local developments such as the Reserve Bank of India (RBI) move to hike policy rates.

However, the latest PFRDA data (as of July 8) showed that NPS assets growth may have returned to the pre-pandemic levels. 

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