The report revealed that the Indian index value increased from 44.6 in 2018 to 45.8 in 2019 due to small increases in each sub-index.
The Pension Fund Regulatory and Development Authority (PFRDA) said 2 million customers had joined the Atal Pension Yojana (APY) in the current financial year. APY is a pension scheme launched by the Government of India and is focused on the unorganised sector workers.
At FICCI’s 21st Annual Insurance Conference, PFRDA chairman Supratim Bandyopadhyay said, “There are few other schemes like Pradhan Mantri Shram Yogi Maan-dhan launched by the government for different categories of people. But APY is doing quite well and the system that we have designed and developed ensures that new people join us and at the same time they continue to remain with us.”
He said despite lockdown and these challenging times, more than 2 million customers had joined APY. Market participants say even though there has been some awareness about the pension products in India, overall pension coverage has remained low in India. According to the Melbourne Mercer Global Pension Index, India ranked 32 out of 37 countries. The report revealed that the Indian index value increased from 44.6 in 2018 to 45.8 in 2019 due to small increases in each sub-index.
The PFRDA-regulated National Pension System (NPS) is likely to cross assets under management (AUM) of Rs 5 lakh crore by September, said Bandyopadhyay. According to Section 80CCD(1B), investors are allowed a deduction on the amount contributed towards NPS up to Rs 50,000. “There are multiple choices available for investors investing in NPS. We allow changing the fund manager free of cost once a year. You can change your asset allocation twice a year without any cost involved. At the point of exit, we have now 12 annuities service providers empanelled with us and they have a host of schemes from which they can choose the annuities,” added Bandyopadhyay.
Currently, under the NPS, at least 40% of the accumulated pension wealth of the subscriber needs to be utilised for the purchase of an annuity, providing for the monthly pension to the subscriber, and the balance 60% is paid as a lump-sum to the him/her. Even as 60% of the money received at maturity from NPS is tax-free, annuities are taxed in the hand of investors either as income from salary or income from other sources.