The Pension Fund Regulatory and Development Authority (PFRDA) has established a panel to explore the long-term induction of different asset classes for improving returns for pensioners under the National Pension System (NPS). According to reports from PTI, PFRDA Chairman S Ramann emphasized the need for assets that provide continuous and steady growth over a long period of time without volatility. As reported by PTI, Ramann stated that "We have to look at new assets which can provide continuous and steady growth over a long period of time without volatility...We cannot show a very high return in one year, and after that, it drops off. That volatility we need to avoid." The authority is learning from the experience of pension funds globally to develop a smooth glide path that ensures steady and rising returns for NPS holders. As per PFRDA, the regulator has set up a committee which is looking into the long-term induction of different asset classes, with Chairman Ramann noting that "We are learning from the experience of pension funds which are there globally. I am sure we will come up with a very good smooth glide path where we will be able to ensure that the returns coming to the NPS holders will be steady and will be on the rise."
The National Pension System is experiencing significant growth with subscribers expected to rise over 22% this year. As reported by PTI, the total number of subscribers under NPS at the end of FY26 stood at 2.17 crore, with a total corpus of ₹15.95 lakh crore. The regulator is focusing on expanding NPS coverage to various sub-segments including agriculture, farmers, MSMEs, and SHG groups, targeting 20-25 crore people to ensure retirement security for all segments of society. According to PFRDA, Chairman Ramann noted that "We have created the sub-segment of agriculture, farmers, people who are largely agrarian-based, we have the smaller MSMEs, which are again in the various clusters that we have across the country. We, of course, even have the SHG groups where many of the persons are now going into their own individual businesses." He emphasized that "So we have to target all these groups and this is what constitutes maybe 20-25 crore people and that is where it is our public duty to ensure that the right message goes to all these people (to save money for retirement)."
Regarding the Minimum Assured Pension plan, PFRDA Chairman S Ramann confirmed it remains on the table for consideration. According to PFRDA, Ramann stated that "We are certainly looking at the concept of a Unified Pension Scheme for the private sector. That is the way it is easily understood if one has a guaranteed scheme." He noted that there is a need to balance risk and return, stating that "Somebody has to provide a guarantee for assured return, like in Atal Pension Yojana (APY), the government gives assurance and they bear the cost." The authority is exploring the concept of a Unified Pension Scheme for the private sector to provide guaranteed returns, similar to how the government provides assurance in the Atal Pension Yojana (APY) while bearing the associated costs. As per PFRDA, this approach ensures that "There is a need to balance risk and return, somebody has to provide a guarantee for assured return, like in Atal Pension Yojana (APY), the government gives assurance and they bear the cost."
Last year, PFRDA issued a consultation paper on proposals for flexible, assured and predictable pension schemes under the NPS framework. As reported by PFRDA, the paper proposed three distinct schemes catering to different subscriber needs for assured and flexible pension payouts. The regulator is working to ensure that the right message reaches all segments of society, including various sub-segments across the country, to promote retirement savings among diverse population groups. According to PFRDA, Ramann emphasized that "We have to target all these groups and this is what constitutes maybe 20-25 crore people and that is where it is our public duty to ensure that the right message goes to all these people (to save money for retirement)." The focus on NPS for the non-government sector involves sensitising various sub-segment of society for securing their future, ensuring comprehensive retirement planning coverage across different economic segments.
India's retirement landscape is undergoing a gradual transformation as private sector participation in the National Pension System (NPS) rises. According to HDFC Pension MD & CEO Sriram Iyer, government sector NPS will continue to dominate overall assets under management because contributions are mandatory for government employees. Out of the nearly ₹16 lakh crore NPS corpus, around ₹12.5 lakh crore comes from government subscribers, while private sector assets account for roughly ₹3.5 lakh crore. The government sector incremental AUM per year is ₹1.1-1.2 lakh crore, while for the private sector, it is in the region of ₹0.9-0.95 lakh crore. NPS offers exposure to capital markets at a relatively low cost, allows participation in equities, provides greater investor control and transparency, and gives subscribers flexibility in choosing their asset allocation based on their risk appetite and retirement goals. The product is geared to deliver a higher return because you could go up to 100% in equity under MSF, or you could go up to 75% in equity otherwise. Over long periods of time, equity is expected to deliver a double-digit return or close to double-digit return. Even with a 50:50 equity-debt allocation, NPS has delivered better long-term outcomes than EPF because equity exposure can generate double-digit returns over longer holding periods.
