Corporate NPS: How Employers Can Make Retirement Saving More Attractive To Gen Z?

Employers need to do more to make retirement planning relevant to younger employees, panellists said at the second edition of the ‘Retire Smart: Financial Wellness Leadership Series’ in Gurgaon. The discussion focused on how the Corporate National Pension System (NPS) can help companies improve employee benefits, retention and long-term financial security.

The session was organised by the Pension Fund Regulatory and Development Authority (PFRDA) and Outlook Money as part of a 28-city awareness campaign for HR and finance leaders.

The panel featured Ajay Bagri, CFO, SEIL Energy India; Bhavya Sharma, Senior Director, Communications, Policy & ESG, Urban Company; Kuldeep Parashar, Founder, PensionBox; Naresh Kumar Bansal, CFO, Q3 Technologies; and Rajiv Sahdev, President & Group CHRO, JBM Group. The discussion was moderated by Nidhi Sinha, Editor, Outlook Money.

A key concern raised during the discussion was the reluctance among younger employees to lock away money for retirement.

Bagri said NPS is an option for employees at his company, but the biggest concern is the long lock-in period.

“The only concern that employees share is they don't want to lock in for long years,” he said.

Bagri said his company also conducts financial awareness sessions, particularly around tax-saving investments. He added that employees are given guidance on options such as EPF and NPS.

The panel also discussed the need to make retirement planning more engaging for younger workers, who often prioritise immediate financial goals.

Parashar said the rise of instant gratification has made long-term retirement planning more difficult.

“A lot of our lives have moved towards extreme instant gratification,” he said, pointing to how consumers now expect services and purchases to be delivered almost instantly.

He said this makes it harder to convince people to save for a goal that may be decades away.

Bansal said employers need to encourage young employees to start investing early because the power of compounding increases with time.

“I start convincing them that you start saving because the compound will still be running,” he said.

He also highlighted NPS as a long-term investment option that can offer tax advantages.

The panellists said financial awareness within companies cannot be limited to employees. HR and finance teams also need to understand retirement products before they can effectively communicate their benefits to employees.

Sahdev said younger employees often want financial benefits upfront rather than prioritising retirement savings.

“In the current generation, the problem is they want everything upfront,” he said.

The discussion also highlighted the role of employers in nudging employees towards retirement planning. Panellists said companies may need to rethink how they communicate NPS to younger workers, including by linking retirement savings to goals such as financial independence and early retirement.

The panel also discussed the administrative challenges companies face while implementing Corporate NPS. Parashar said employers often have questions around the process and need greater support from the ecosystem to make onboarding easier.

Sharma shared Urban Company's experience of implementing NPS for service professionals working on its platform. She said the initial rollout had some challenges, but employees eventually understood the benefit of the programme.

The discussion also touched on the importance of communicating the financial benefit of NPS in simple terms.

Bagri said employees are more likely to understand the value of the product when tax savings and potential long-term returns are clearly explained.

The panellists agreed that the success of Corporate NPS will depend not only on employers offering the facility but also on how effectively they educate employees about its long-term benefits.

The Gurgaon session was the second edition of the 28-city ‘Retire Smart’ awareness campaign, which aims to encourage HR and finance leaders to make retirement planning a more integral part of employee benefits.