look news india
Amidst the national resolve to make India ‘Developed India 2047’, pension regulator PFRDA has presented the most ambitious roadmap till date to provide financial support and pension guarantee to the country’s working population in old age. The Pension Fund Regulatory and Development Authority has announced that by the year 2047, the total workforce of the country i.e. more than 60 crore people will be brought under the ambit of the National Pension System (NPS). PFRDA Chairperson S. Ramanna clarified that considering the demography of India, Universal Pension Coverage is no longer just a financial option but has become a social imperative.
As part of the first phase of this long-term vision, the regulator has set an immediate target of adding approximately 2 to 4 crore new non-government subscribers to NPS in the next 2 to 3 years.
PFRDA has made it clear in its strategy that in the coming years its main focus will be on the non-government sector and unorganized workforce.
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Government sector stronger than before: The NPS framework for Central and State Government employees has been working successfully for the last 18-20 years and is almost completely saturated.
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Fast growth of 22% to 25% in private sector: The annual growth rate of NPS subscribers in the non-government segment is being recorded between 22% to 25%.
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Protection to self-employed and gig workers: Crores of freelancers, delivery partners, small businessmen, shopkeepers and professionals present in the country are still deprived of any formal pension system, who are now being connected to NPS through digital channels.
To completely eliminate the traditional paper-based and cumbersome process of opening a pension account, the regulator has rolled out state-of-the-art digital platforms:
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NPS Tatkal: Through this platform based on UPI and Aadhaar-based e-KYC, any citizen can open an NPS account from their mobile in just 2 minutes.
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StAR NPS Platform: The process of onboarding new subscribers through distributors, banks and fintech aggregators has been made extremely smooth and transparent.
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Detail of Pension Mitras and Agents: A large network of certified pension advisors is being created across the country to increase financial literacy and awareness of retirement planning at the grassroots level.
This pension scheme of PFRDA will not be limited only to metro cities or corporate offices, but will be taken to the last reaches of rural India.
For this, Primary Agricultural Credit Societies (PACS), which are being computerized and digitalized with the help of NABARD, are being authorized as NPS service points. Farmers, rural artisans and small agricultural laborers in rural areas will now be able to deposit small savings in NPS every month through their nearest PACS Samiti, which will enable them to get regular monthly pension after the age of 60 years.
Along with pension in old age, the biggest concern is rising hospital bills and treatment of serious diseases. To address this dual challenge, PFRDA has developed an innovative product named ‘NPS Swasthya’:
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Medical Pension Account: A separate dedicated medical pension account has been created under NPS.
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Linkage to Top-up Health Insurance: This account will be directly linked to an affordable super top-up health insurance.
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Cashless and co-payment facility: Co-payments, deductibles or non-covered expenses on hospitalization will be paid directly from this medical pension account, while the remaining major expenses will be borne by the top-up insurance policy. This will enable senior citizens to get the best healthcare services without breaking their basic pension or retirement fund.
NPS is the most powerful means of wealth creation and pension in the long term for the young generation working in private jobs and startups in cities like Lucknow, Kanpur, Noida, Prayagraj, Delhi, Mumbai or Bengaluru, the capital of Uttar Pradesh. NPS offers a balanced mix of equities, corporate bonds and government securities, which has given annual returns of 10% to 12% over the years. Apart from this, the additional tax exemption of ₹ 50,000 available under Section 80CCD(1B) of the Income Tax Act also makes it a great option for tax saving.
This vision of PFRDA to bring 60 crore people under the pension ambit will prove to be a game changer in the future towards making India a self-reliant and secure society.