Summary of this article
EPF alone may not build enough retirement corpus amid inflation and rising healthcare costs.
Starting retirement planning early helps investors benefit from compounding and reduce investment requirements.
Corporate NPS offers market-linked growth, tax benefits, flexibility and lifelong retirement income.
Retirement planning should not begin in one’s 50s, and relying solely on the Employees’ Provident Fund (EPF) may not be enough to build an adequate retirement corpus, said Shriram Iyer, managing director and CEO of HDFC Pension Fund Management, at the Retire Smart: Financial Wellness Leadership Series, powered by the Pension Fund Regulatory and Development Authority (PFRDA) and Outlook Money, on August 7, 2026.
In his address, Iyer highlighted three common retirement myths among employees and stressed the need for early investing, market-linked retirement savings and greater adoption of the Corporate National Pension System (NPS).
Myth 1: EPF Alone is Enough for Retirement
Addressing the belief that EPF is sufficient for retirement, Iyer said rising inflation, especially healthcare inflation, has widened the gap between retirement savings and future financial need. Using an illustrative example, he said an employee may accumulate around Rs 85 lakh through EPF after 35 years of service, while maintaining a similar lifestyle after retirement could require a corpus of nearly Rs 3.50 crore.
Iyer said he was not criticising EPF, but relying only on it may not be enough to create a sufficient retirement corpus. “I’m not trying to criticise EPF. I’m just trying to make a point about why you need to have a product which is market-linked,” he said.
He added that employees can optimise their retirement savings by combining EPF with Corporate NPS. According to Iyer, this approach allows employees to retain the stability of EPF while gaining exposure to market-linked investments through NPS along with available tax benefits.
Highlighting India’s retirement preparedness, Iyer said the country’s retirement income replacement ratio remains low, with post-retirement savings covering only around 45 per cent of the income required to maintain a similar lifestyle after retirement.
Myth 2: Retirement Planning Can Wait Until Later in Life
Iyer said another common misconception is that retirement planning can be delayed until later years. “People start waking up to the reality of retirement after the age of 55. It’s way too late,” Iyer said.
He added that delaying retirement planning by even 10 years can significantly increase the amount an individual needs to invest to achieve the same retirement goal due to the impact of compounding.
Myth 3: NPS Lock-In and Annuity Reduce its Attractiveness
On the perception that NPS lock-in limits flexibility and annuity provides low returns, Iyer said both views were misplaced. He said staying invested through market cycles is important as investors often react to short-term volatility and exit investments at the wrong time.
“A product like NPS doesn’t allow you to get out, which I think is the biggest positive of this product,” he said.
Iyer also defended annuities, saying they provide guaranteed life-long income and help retirees manage longevity risk. He added that annuities can also support succession planning, as certain structures allow benefits to continue for the spouse after the demise of the primary annuitant.
Financial Well-Being and Role of HR leaders
Iyer urged employers and HR leaders to play a bigger role in improving employees’ financial wellbeing. He said financial stress affects workplace productivity and retirement planning should be considered an important part of employee welfare.
He said HR teams can encourage employees to start retirement planning early and increase awareness around retirement schemes. “You have an ability to influence the decision making of your employees,” he told HR professionals.
Corporate NPS Adoption Remains Limited
Citing data from the NPS ecosystem, Iyer said more than 25,000 corporates have adopted Corporate NPS and the subscriber base has crossed 2.90 million. However, he said adoption levels remain low despite the scheme being available for more than a decade and called for greater awareness among employers and employees.
NPS Offers Flexibility Beyond Retirement Savings
Iyer highlighted the flexibility offered by NPS across investment choices and styles. Subscribers can choose between Active Choice and Auto Choice based on their risk preference.
He said NPS allows allocation across asset classes including equity, government securities, corporate bonds and alternative assets.
Subscribers can also change asset allocation, switch pension fund managers, and continue their NPS account even after changing employers.
He described NPS as one of the lowest-cost actively-managed retirement products, with digital onboarding, tax benefits, and investment flexibility, thereby making it a long-term retirement planning solution.
