Summary of this article
PFRDA allows MFDs to onboard NPS subscribers through StAR NPS platform
StAR NPS simplifies NPS account opening for subscribers
The platform enables direct contribution and settlement
The Pension Fund Regulatory and Development Authority (PFRDA) is seeking to expand the reach of the National Pension System (NPS), and to move in this direction, has allowed the mutual fund distribution (MFD) network to onboard subscribers under the pension scheme. During a recent outreach event for MFDs held in Chennai on Saturday, the regulator showcased the StAR NPS platform, which is designed to enable MFDs to act as Pension Agents. StAR is an online platform for onboarding subscribers. This new platform, which was launched some time back, is an effort to simplify the NPS onboarding process and expand its reach to a new demographic of subscribers.
Speaking at the event, S. Ramann, Chairperson of PFRDA, said that expanding pension coverage is directly linked to the ease of access, seamless onboarding, and strong last-mile outreach. He emphasised that MFDs already have customers who trust them, and this is MFDs’ valuable asset, according to a report by Moneycontrol. For PFRDA, this trust is a critical element for bringing retirement planning into everyday financial discussions. For them, offering NPS to their customers would mean deepening their relationship with customers that can span over decades, starting from a client’s working years to their retirement.
NPS currently has an impressive pool of assets of approximately Rs 18.4 lakh crore; however, the opportunity to grow it is vast. According to PFRDA, there is a significant opportunity to expand this pool by utilising the already existing financial distribution networks.
Reportedly, Ashutosh Singh, MD & CEO of BSE Index Services Pvt. Ltd highlighted how technology can simplify the onboarding process and improve accessibility. To stress what can be achieved when technology enhances accessibility, he pointed to the meteoric growth of the BSE StAR MF platform, which saw a rise from 10 million transactions monthly in May 2021 to consistently reaching around 80 million transactions today.
It was noted that the industry hopes to bring similar simplicity and scale to the StAR NPS platform, too. This platform facilitates easy onboarding through electronic data capture, CKYC, and DigiLocker-based verification. It also provides direct remittance of subscriber contributions to the Trustee Bank and integrates Central Recordkeeping Agencies (CRAs) for instant Permanent Retirement Account Number (PRAN) generation.
Beyond the simplified onboarding portal, the StAR NPS also provides a direct settlement mechanism by routing contributions directly to the Trustee Bank. So, the system eliminates the need for fund pooling and manually reconciling the details at the Point of Presence (PoP) level.
The streamlined operations are aimed at improving the efficiency, transparency, and overall experience for subscribers.
