The Pension Fund Regulatory and Development Authority (PFRDA) on Friday stated India’s pension saturation was too low at about 15% of the nation’s GDP, whereas it was 100% and even 200% for a lot of developed nations.
The market share of pensions as a share of the gross home product (GDP) was important in nations resembling Japan, Norway, the U.S. and subsequently, in India there was an enormous potential for pension- market development within the coming years, stated PFRDA Chairman Supratim Bandyopadhyay.
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However, he stated the non-government pension sector witnessed an annual development of 65% in March over the earlier yr, and the section was anticipated to develop considerably within the present fiscal as nicely.
The non-government area at the moment had complete of property below administration price ₹1.23 lakh crore and this was anticipated to cross ₹2 lakh crore by March 2023, he forecast.
“There are 55 lakh energetic clients in the non-government sector and 20 lakh new clients are anticipated to be added this yr,’‘ he said. Equity brought better returns, and high risk alike
Equity-linked plans offered the highest returns at 12.12% followed by Central government schemes (at 9.43%) and State government schemes (at 9.29%).
“Some 75% of the total pension investment can be put in equity which offers higher returns and at the same time, it also comes with some risk,’‘ Mr. Bandyopadhyay explained.
To mitigate the risk involved, PFRDA is currently in the process of developing a new Minimum Assured Return Scheme, which is expected to be available in the market by the end of September.
The body has also proposed an amendment of PFRDA Act and also mooted the formation of a special body for pension advocacy in line with AMFI and Insurance Council.
Addressing a media conference here on Friday, Mr. Bandyopadhyay further said, the country’s pension property stood at ₹35 lakh crore as on March with Employees Provident Fund Organisation alone accounting for 41% of it at ₹14,46,320 crore and insurance coverage contributing one other 30% with greater than ₹10 lakh crore.
Source: www.thehindu.com