Pension regulator PFRDA remains “hopeful” about reaching the set annual goal of adding 13 lakh new NPS subscribers from the private sector this fiscal, despite the current count being only 6 lakh, its Chairman Deepak Mohanty said on Friday. 

The latest PFRDA move to effect slew of changes in the Points of Presence (PoP) regulations will drive increased NPS adoption from the non-government sector, he said.

Last fiscal, PFRDA had added a million new NPS subscribers from private sector. As of January 13, there are 5.2 million NPS subscribers in private sector with assets under management (AUM) of ₹2.09 lakh crore. 

Private sector participation, which has been on the rise in recent years, is one of the main factors behind robust growth in overall NPS assets, which crossed ₹11-lakh crore mark on January 10 this year. 

“It is now a bit of a challenge (to get 7 lakh additional new NPS subscribers in just two remaining months). But Iam still hopeful we will achieve the 13 lakh new NPS subscribers target from private sector. We are doing focused campaigns to get more corporates on board,” Mohanty told businessline when asked if he was confident of meeting the target. 

Private sector adoption for NPS has been growing at brisk pace in the recent years, but the taxation related changes in budget had adversely impacted interest of new private sector subscribers in this product, experts said. 

The government has in the new tax system done away with tax breaks for contributions to NPS. 

Infact, PFRDA has in its 2024 Budget wish list sent to Finance and Corporate Affairs Minister Nirmala Sitharaman urged the government to consider allowing tax breaks/deductions under the new tax regime for contributions made by employees towards their NPS account.

Providing tax breaks for NPS contributions —akin to Sec 80C deduction provided in old tax regime —in the new tax regime would boost savings for retirement and is a must if India has to evolve into a pensioned society, PFRDA had submitted. 

• Also read: Southern region takes lead in NPS enrolment: PFRDA

PoP regulation changes 

PFRDA has now relaxed its PoP Regulations 2023 so as to allow banks and non-banks to have only single Registration for NPS, instead of multiple registrations required earlier.

Banks and non-banks can operate with just one branch with wider digital presence. This has simplified the registration process and has enlarged the scope for more entities to register for distributing NPS, Mohanty said.

Earlier PFRDA regulations required a PoP to have atleast 15 branches across the country. That stipulation has been done away with, sources said.

To expedite the registration process, the timelines for disposing the applications have been reduced to thirty days from existing sixty days.

PoPs are now required to indemnify the subscribers for any loss suffered due to fraud or negligence of PoPs or its Pension Agent.

To make the selection process more robust, the eligibility criteria in terms of minimum net-worth requirement has been strengthened and increased to ₹2 crore which has to be fulfilled as on the last day of the immediately preceding quarter (as against last day of the immediately preceding financial year). 

To facilitate ease of doing business, the concept of PoP-Sub Entity (PoP-SE) is now subsumed under agency model wherein PoPs may engage these entities as pension agents and utilise the services for distribution of pension schemes. Therefore, no separate registration is required for such entities.

All these changes are part of the latest amendment to the PoP regulations notified on January 10.