Summary of this article
PFRDA targets Rs 100 lakh crore NPS AUM by 2040.
It aims to boost reach through seamless UPI enrolment and bank distribution.
The regulator plans to expand investment options by including unlisted equity and other options.
The Pension Fund Regulatory and Development Authority (PFRDA) plans to reach an asset under management (AUM) of Rs 100 lakh crore by 2040. Speaking at the Tatkal NPS: Advancing Digital Pension Inclusion conference in Mumbai, PFRDA Chairman S Ramann announced the regulator’s plan to expand the National Pension System (NPS) by utilising commercial banks’ distribution networks and integrating the scheme with the Unified Payments Interface (UPI) ecosystem.
Recently, PFRDA has been actively reaching out to stakeholders, running programmes to raise awareness of NPS, onboarding new subscribers, and launching new products. Now, considering the growing citizen demand for retirement savings, PFRDA seeks to expand the market beyond the organic mode by utilising digital financial infrastructure.
To achieve the AUM target, PFRDA is setting up a system to make NPS enrolment seamless via UPI, so that potential subscribers can easily open their pension accounts through digital banking and payment applications without needing much manual intervention from banks.
The new onboarding process will utilise already established UPI and banking infrastructure, making the enrolment process simple, convenient, and fast. It will require only basic identification details, such as mobile numbers and date of birth, to complete account opening.
The Chairman highlighted that this digital framework offers a zero-cost customer acquisition model for banks. So, the financial institutions don’t need additional manpower or physical infrastructure to open new pension accounts. Banks with their vast branch networks and mature digital platforms can play an important role in the distribution of pension products.
Further, PFRDA has already made changes in the commission structure from the beginning of this year, effective January 1, 2026, to boost the distribution of NPS and other pension products. And as per the PTI report, it has yielded substantial results, reflected in the four- to five-fold increase in the revenue of the top 10 points of presence (PoPs).
It has also launched various products and investment options to cater to diverse risk profiles and financial needs of different segments of society, including government employees, informal sector workers, retail investors and others.
Under the investment flexibility reforms, investors who understand the products, various investment instruments and asset allocation to them, can opt for higher equity exposure, up to 100 per cent in equity-oriented schemes.
It has already allowed pension fund managers to invest pension assets into real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), and is now evaluating expanding the investment instrument universe further, by including unlisted equities, project finance, and Greenfield and Brownfield development projects.
Ramann emphasised that considering citizens’ longevity risk and financial security, it is vital to expand pension coverage to more people. Therefore, PFRDA is putting in place a system for easy onboarding, different investment options, broader asset classes for investment, and commission models to extend long-term retirement planning to millions of Indian citizens.
