India’s retirement-income replacement rate is currently around 35–40%, compared with a roughly 60% level globally, according to Pension Fund Regulatory and Development Authority (PFRDA) Chairman S. Ramann, as the regulator seeks to cover 30 crore people through the National Pension System (NPS) and Atal Pension Yojana (APY) over the next four to five years.

“Roughly, the world says your replacement rate should be about 60%. So 60% of your last pay should roughly be the kind of money that you get when you are in retirement mode. In India, it’s in the region of about 35% to 40%,” Mr. Ramann said during an interaction in Chennai on Friday.

“So we have to encourage people to invest more. That’s the only way,” he added.

The question of how much people need to save for retirement came up as PFRDA seeks to expand pension coverage beyond government employees.

Asked whether the regulator would set a target for how much an individual should save to secure a decent retirement income, Mr. Ramann said it was difficult to predict how much a person would ultimately save.

“It’s impossible to, you know, predict that,” he said.

He said PFRDA could instead provide illustrations of how regular contributions could potentially grow over time.

“I can only help you by saying that if you save 20,00 rupees every month from past performance, I can tell you that it is possible that after 18 years, your corpus may be ₹10 lakhs. That’s the kind of guidance that we can give,” Mr. Ramann said.

He said the amount an individual saves depends on their lifestyle and priorities.

“I cannot have any control over that. How much you save is totally dependent on your lifestyle and your priorities. So, we can only encourage people to save for the long run,” he said.

Contributions among NPS subscribers currently range from ₹200 a month to ₹2 lakh a month, Mr. Ramann said

“People are contributing 200 rupees a month. People are contributing 2 lakh rupees a month. So both exist,” he said.

PFRDA targets non-government sector

PFRDA currently has about 2.2 crore NPS subscribers, including government and non-government subscribers, Mr. Ramann said.

The regulator is focusing on the non-government segment, while government enrollment is growing on its own.

“Our job is to focus on the non-government sector because those are the people who don’t have the benefit of NPS, they don’t know about NPS and we must bring them into the NPS,” he said.

PFRDA wants to cover 30 crore people through NPS and APY over the next four to five years, Mr. Ramann said, adding that APY has around 10 crore customers.

The regulator is conducting around 350–400 outreach programmes across the country, targeting groups including farmers, milk cooperatives, farmer-producer organisations and MSMEs.

Mr. Ramann also said PFRDA sees significant scope to expand pension coverage among self-employed people and gig workers.

Digital push for NPS

PFRDA is relying on digital platforms to expand NPS distribution. The StAR NPS platform is being developed with BSE, while NPS Tatkal is being developed with NPCI and BHIM, Mr. Ramann said.

The platforms allow banks, pension funds and distributors, including mutual fund distributors, to onboard subscribers digitally. Contributions can also be made through the UPI.

PFRDA provides distributors with a ₹200 onboarding fee and roughly 0.3% of assets under management (AUM) as annual commission, Mr. Ramann said.

He said digital onboarding could substantially reduce the cost of acquiring customers.

“Between this, I am confident that we should be able to get people interested because on these digital platforms, it is costing zero to the distributors, be it banks or pension funds to bring in the commission, to bring in the customers,” he said.

PFRDA seeks more resilient returns

Asked what major pension reform he would prioritise, he said the focus would be on “resilience in our returns.”

He said pension funds need to diversify across asset classes to generate better returns while keeping volatility low.

Mr. Ramann said the system currently has around 5% of the corpus in alternative assets, including REITs, InvITs and AIFs.

PFRDA is examining how pension funds can develop the expertise and capability to make direct investments in companies, he said.

The PFRDA chief cited Canadian pension funds’ investments in India as an example of the investment capability he wants Indian pension funds to develop.

The objective, he said, is to achieve “a good double digit return year after year” while maintaining low volatility.

UPS cost higher than NPS, lower than OPS

On the Unified Pension Scheme (UPS), Mr. Ramann said its cost to the government would be higher than NPS but substantially lower than the Old Pension Scheme (OPS).

“So, if I were to say NPS costs the government ₹100, UPS may cost government ₹170, ₹180. OPS costs the government ₹450. So, that’s the kind of difference we are talking about,” he said, adding that “OPS is unsustainable.”

Mr. Ramann said 10–12 State governments have announced UPS, with individual schemes potentially containing variations.

At the Central Government level, about 1.3–1.4 lakh employees opted for UPS out of roughly 22 lakh, he said, exuding confidence that UPS should work in the long run, particularly if inflation comes down.

Competition among pension funds

PFRDA has 14 pension fund managers, and Mr. Ramann said greater competition could improve investment returns and expand the reach of NPS.

Asked what subscribers would gain from having more pension fund managers, he said the funds are primarily focused on investment and getting better returns for subscribers, while also helping expand reach.

“Pension funds do two things. One, they are largely focused on investment and getting better returns for their subscribers. That is really where the expertise lies and more and more people who come in can provide better competition in terms of the returns that they provide to the customers,” he said.

NPS Vatsalya, Swasthya

PFRDA’s NPS Vatsalya, which allows parents or guardians to build retirement savings for children, has crossed four lakh unique customers, Mr. Ramann said.

The regulator is also preparing NPS Swasthya, which combines pension savings with a dedicated health corpus and top-up health insurance.

Mr. Ramann said PFRDA has completed a proof of concept and finalised the product design. The product is likely to be launched in a month.

PFRDA has also extended the age up to which subscribers can remain invested in NPS to 85, alongside changes aimed at providing greater flexibility around entry, exit and scheme selection.

Asked whether Gen Z needs to be treated differently when it comes to pension saving, Mr. Ramann said the regulator does not want to take a softer approach with younger workers.

“So, you may call yourself Gen Z…you’re also going to become old. So, if you do not start saving today, your old age is not going to be very good,” he said. He added that “the discipline of saving is the biggest change that we hope NPS will bring in.”

Ranjit K. Jain
| Photo Credit: Special Arrangement

Thiruvananthapuram:

A detailed inspection done over the way the Kerala government’s monthly Rs 1,600 social welfare pension is being distributed has revealed that the amount is also being taken by at least 1,458 serving government officials including Gazetted officers.

According to estimates, a sum of Rs 23 lakh has been used to pay even the serving government officials.

These shocking details surfaced when the Finance Department asked for an inspection to look into this and on perusal it has surfaced that serving government officials are among those who are currently getting the Rs 1,600 monthly social welfare pension which should ideally go to the needy, down-trodden and the under-privileged.

Among those who are currently getting the pension include school and college teachers, employees working in the health and other departments of the state government .

After learning about the blatant violation of the rules, Kerala Finance Minister K.N. Balagopal called for strict action into the matter, and also recommended recovery of the amount with interest. He has also ordered disciplinary action against the wrong-doers.

In Kerala, there are around six million (60 lakh) people who get a monthly social welfare pension and at times it goes into arrears too, since the state government exchequer is currently in dire straits.

B. Alwyn Prakash, former chairman of the State Finance Commission, said that the need of the hour is a fool-proof audit of the entire social welfare pension.

CPI-M state secretary M.V. Govindan said “now that this has come out, let further action start as there are chances of government officials doing such things”.

Meanwhile, sources aware of the development said that the process of verification will continue to ensure that all the ineligible beneficiaries are identified and removed from the beneficiary list.

The Finance Department, over the years, has put in a process to filter the ineligible beneficiaries so that the amount is sent to the ones who fit into the criteria.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

A woman in Taiwan has been accused of hiding her dead father’s body in her home for years to claim his military pension. According to the South China Morning Post, the woman, whose identity has not been revealed, lived with her father for over five decades. 

The authorities first got suspicious last November when health officials were denied entry to her home for dengue-prevention measures. As a result, she was fined NT$60,000 (approximately Rs 1.50 lakh) 

Her constant refusal to allow government officials into her home raised concerns and prompted police involvement. When officers interrogated the woman regarding her father’s whereabouts, she initially claimed he was at a nursing home

When police pressed her further, she changed her story, claiming her brother had taken him to the mainland from their city Kaohsiung. Cops investigated her claim and discovered that the brother had been dead for 50 years, and there was no record that the woman’s father had left Taiwan.

The woman then lied again, saying that her father had died on the mainland and, but could not produce his death certificate. 

The changing narratives led to the police searching her property and found a black plastic garbage bag containing the bones of an elderly person.

Upon investigation, police found that the man had been dead for a long time. A forensic expert explained that a body typically takes one to two years for a body to decompose into skeletal remains.

Notably, the woman’s father had been a military veteran who served for more than 20 years and received a monthly pension according to his rank and service history. Taiwanese military veterans typically receive an average monthly pension of NT$49,379 (approximately Rs 1.27 lakh).

The investigation into the cause of the man’s death is ongoing and authorities will determine whether the woman committed a serious crime beyond just hiding her father’s body.

Under Taiwanese law, damaging, abandoning, insulting, or stealing a corpse can carry serious penalties, including imprisonment for up to five years. If such a crime involves a direct relative or close family member, the sentence may be increased by 1.5 times.

Meanwhile, the woman is currently undergoing medical treatment while under police supervision.