The Pension Fund Regulatory and Development Authority (PFRDA) launched the Association of NPS Intermediaries (ANI) on December 21, in its bid to strengthen the National Pension System (NPS) ecosystem. As pension AUM grows despite a slowing NPS subscriber growth, the body will foster retirement planning, addressing the necessity of early pension planning in the face of changing demographics and rapid urbanisation.

“This landmark initiative brings together key stakeholders from the National Pension System (NPS) ecosystem to foster collaboration, strengthen subscriber welfare, and promote the continued growth of NPS as a critical retirement planning tool for the citizens of India,” the government said in a press release.

This body brings together key stakeholders, including pension fund managers, banks, non-banks, central record-keeping agencies, custodians, aggregators, annuity service providers, and retirement advisors, to expand pension coverage and improve subscriber welfare.

ANI will focus on promoting NPS as a reliable and tax-efficient retirement product, ensuring transparent processes, and prioritizing subscriber welfare. It will represent the interests of intermediaries, collaborate with policymakers to enhance the NPS framework, and work on developing India’s pension market to meet future retirement planning needs. The association will act as an advisory body for the government on matters pertaining to NPS and financial security.

The combined assets under management (AUM) of the Atal Pension Yojana (APY) and the National Pension System (NPS) have exceeded ₹13.8 lakh crore, with a total subscriber base of 8 crore as of October 2024, according to PFRDA data. Of this, APY leads with 6 crore subscribers. The AUM of NPS alone rose significantly, from ₹7.1 lakh crore in FY22 to ₹8.7 lakh crore in FY23, and further to ₹11.4 lakh crore in FY24.

Despite these gains, the yearly growth rate of NPS subscribers has been slowing since February 2023, with monthly additions staying below 1.3% since April. However, the NPS Vatsalya scheme, introduced during Budget 2024 to help parents build a long-term corpus for their minor children, has shown rapid growth. Subscriber numbers under Vatsalya nearly doubled from 33,955 in September to 61,154 in October, signalling increasing interest in the initiative.

“I am confident (ANI) will further strengthen & redouble our efforts in creating awareness to expand pension coverage in India through collective efforts and feedback mechanism,” said PFRDA Chairperson Dr. Deepak Mohanty at the launch conference.

Dr. Mohanty highlighted that the NPS industry has seen rapid expansion in recent years, driven by increased awareness, government initiatives through PFRDA and NPS Trust, and a strong network of intermediaries. He emphasised that NPS's flexibility, transparency, and ability to serve diverse investor groups, from salaried individuals to the self-employed, have made it a preferred retirement planning tool, supported by features like systematic withdrawals, T+0 settlement infrastructure, and accessibility for NRIs. To attract younger investors, the regulatory body is collaborating with digital platforms to enhance transparency and ease of use.