Pensions via UPI: PFRDA chief S Ramann bets on NPS Tatkal, targets 3 crore new subscribers
The Pension Fund Regulatory and Development Authority (PFRDA) plans to bring around 2-3 crore new subscribers into the National Pension System (NPS) over the next two years, PFRDA Chairperson S Ramann said on Thursday.
The regulator is looking to expand pension coverage by making it easier for people to open NPS accounts and contribute digitally, particularly through the newly introduced NPS Tatkal facility.
“We are actually looking at about 2-3 crore subscribers coming in the next two years. NPS Tatkal will give us the ability to spread the reach of NPS,” Ramann said on the sidelines of NPS Diwas.
NPS accounts can be opened through UPI
Under NPS Tatkal, new subscribers can enrol in the pension scheme through a UPI platform, starting with the National Payments Corporation of India’s (NPCI) BHIM UPI application.
Five banks have so far joined the initiative: State Bank of India, HDFC Bank, ICICI Bank, Axis Bank and IDFC FIRST Bank.
The facility allows individuals to open an NPS account using a KYC-verified bank account through a UPI application. Subscribers can also make their NPS contributions directly through UPI.
According to PFRDA, the digital onboarding facility is expected to make it easier to expand pension coverage beyond major urban centres and reach people in tier 2 and tier 3 cities.
Focus on informal sector workers
Ramann said the regulator expects NPS Tatkal to encourage more individuals working in the informal sector to join the pension system.
The simplified digital registration process is intended to remove some of the earlier hurdles involved in opening an NPS account, particularly for people who may not have easy access to traditional registration channels.
Until now, customers could not directly enrol in NPS or open a new account through BHIM or their bank’s UPI application. They could use UPI for subsequent contributions after becoming NPS subscribers.
To formally join the NPS, individuals were required to complete registration either online or offline and obtain a Permanent Retirement Account Number (PRAN).
NPS replaced old pension scheme in 2004
The government introduced the defined-contribution National Pension System on January 1, 2004, replacing the old pension scheme.
Under NPS, subscribers make regular contributions during their working years. The accumulated contributions are invested in market-linked financial instruments and the retirement corpus is subsequently used to provide retirement benefits.
The NPS is mandatory for central government employees covered by the system, while individuals working in the private sector can opt to join the scheme voluntarily.
With the NPS Tatkal facility, PFRDA is seeking to make digital access to the pension system simpler and broaden participation among workers who have traditionally remained outside formal retirement savings mechanisms.
