The Finance Ministry has called on the newly formed “Association of NPS Intermediaries” to play an active role in advocating the National Pension System (NPS) to drive its adoption among individuals.
This call to action came during a virtual keynote address delivered on Saturday by the Department of Financial Services (DFS) M Nagaraju at the official launch of “Association of NPS Intermediaries”, a collective platform representing all stakeholders in the NPS ecosystem.
This newly set up industry body comprises key stakeholders including Points of Presence (Bank and Non-Bank), Central Record Keeping Agencies, Trustee Banks, Custodians, Aggregators, Annuity Service Providers, Pension Agents, Retirement Advisors, and other industry participants.
The primary objectives of the association are to promote NPS as a reliable, flexible, and tax-efficient retirement product; Focus on subscriber welfare by ensuring smooth and transparent processes within the system; and Collaborate with regulators and policymakers to improve the NPS framework and contribute to developing the pension market in India.
The NPS, launched in 2004, has seen steady growth, with increasing participation from both the government and private sectors. It has seen frenetic growth in the post Covid years clocking compounded annual growth of near 30 per cent. As of mid-December 2024, NPS assets under management has exceeded ₹13.8 lakh crore, up 28 per cent on a year-on-year basis.
Early planning
Nagaraju emphasised the importance of early pension planning, especially in light of shifting demographics, rapid urbanisation, and changing family structures. With the evolving societal landscape, it is imperative for individuals to start planning early for their pension needs. The role of the Association of NPS Intermediaries in creating awareness and promoting the NPS is crucial, he noted.
The DFS Secretary also assured the association of the Ministry’s full support in their endeavours. “We will examine any feedback from the association with utmost care and urgency to ensure that the NPS evolves in alignment with the needs of its subscribers,” he said.
PFRDA Chairperson Deepak Mohanty said, “The launch of the Association of NPS Intermediaries is a significant milestone for the pension sector. I am confident it will further strengthen and redouble our efforts in creating awareness to expand pension coverage in India through collective efforts and feedback mechanism”, he said.
Mohanty also said that it unites various stakeholders, including Pension Fund Managers.
The Association will lead the charge, with guidance from its members and regulators, to become a global benchmark for financial security, he added.
The formation of the “Association of NPS Intermediaries” marks a significant step in streamlining efforts to popularise the national pension system.
With India witnessing a demographic shift towards a younger workforce and increasing life expectancy, the Finance Ministry is keen to position the NPS as a robust tool for ensuring financial security in retirement.
Experts believe that sustained advocacy and simplification of processes are essential to boost voluntary adoption, particularly among the self-employed and private sector employees.
