A big and relief news is coming out regarding the National Pension System (NPS) for crores of employed, self-employed and common citizens across the country. The Pension Fund Regulatory and Development Authority (PFRDA) has prepared a very ambitious and new 'secret plan' to completely overhaul the retirement planning system of the country. The main goal of PFRDA is to directly increase the number of non-government NPS subscribers from the current 90 lakh to 35 to 40 crore within the next 5 years. PFRDA Chairman Sivasubramaniam Raman has revealed this big mega plan during a special outreach program organized in Kolkata.
Target to add 2 to 3 crore new people every year
At present, the number of non-government NPS subscribers is limited to only around 90 lakhs. But now the regulatory body does not want to limit it only to government employees or selected employed people, but wants to extend it to every corner of the country. To achieve this huge target, a concrete strategy has been made to add about 2 to 3 crore new subscribers every year through digital and offline mediums. Just as 'Atal Pension Yojana' has connected about 10 crore people through regional rural banks and other banks, on the same lines, preparations are being made to take NPS to every household.
Digital onboarding will open account in seconds
Technology is being used extensively to make the NPS process very simple and easy for the general public. For this, the 'Star NPS (StAR NPS)' platform is being rapidly promoted, which has been prepared by Bombay Stock Exchange (BSE) Technologies.
The biggest feature of this digital platform is that with the help of CKYC and DigiLocker, the entire verification is completely paperless. With this, any common citizen can generate his Permanent Retirement Account Number (PRAN) and join the scheme in just a few minutes without any complicated paperwork.
Mutual fund distributors will become pension agents and commission will increase
A huge responsibility is being entrusted to the Mutual Fund Distributors (MFDs) of the country to rapidly expand the scope of NPS. PFRDA is motivating these distributors to act as 'Pension Agents' so that they can use their existing customer network and trust to connect more and more people to the National Pension System. To increase active participation of distributors in this work, their commission has also been increased to almost three times. The Star NPS platform connects this entire process directly to Central Record Keeping Agencies (CRAs) and banks, making the onboarding process complete in the blink of an eye.
4 new pension fund options open for investors
To make the scheme more attractive and competitive for customers, PFRDA has also approved four new pension funds through '온-tap licensing'. After this, the total number of pension fund managers in the country has increased to 14. This gives investors and subscribers more options than ever before to better manage their retirement savings and choose the fund of their choice.
PFRDA Chairman has emphasized that NPS is not only a very safe long-term investment, but it has also given excellent returns in the last 15 years. According to the data, 'Conservative plans' (i.e. low-risk options) of NPS have also given excellent returns of 9.2% to 9.3% per annum on an average, making it a great option for the future.