‘OPS unsustainable for states; concept of funded pension account absolutely essential’, Pg12

Key Highlights:

• As of February 1, 2026, the total Assets Under Management (AUM) of pension funds reached approximately Rs 17 lakh crore, marking a 20% year-on-year growth.
• The Atal Pension Yojana (APY) has a smaller contribution of around Rs 1,300 crore, but accounts for 7 crore of the nearly 9 crore active subscribers.
• Chhattisgarh has returned to the National Pension Scheme (NPS), while Punjab continues to contribute to the NPS despite expressing interest in the Old Pension Scheme (OPS).
• The Pension Fund Regulatory and Development Authority (PFRDA) is experimenting with new products like the NPS Swasthya Pension Scheme and working on transparent pension payout products to compete with annuities.
• Total pension fund investments as of February 1, 2026, reached Rs 11.36 lakh crore, a 17% increase from March 31, 2025, and a 21% year-on-year growth.
• Eight states, including Maharashtra and Odisha, have adopted the Unified Payment Interface (UPI).

Detailed Insights:

• The PFRDA aims to ensure every Indian has a pension account and is dividing the organization into multiple distribution channels, including agri, MSME, self-help groups, and platform workers.
• The PFRDA believes that the OPS is unsustainable for state governments and emphasizes the importance of continuing contributions to the NPS as a funded account.
• The Economic Survey 2025-26 highlighted expanding interoperability across NPS, APY, and other schemes for seamless portability, but the PFRDA clarifies that there is no concept of interoperability within NPS.
• Portability between Employees’ Provident Fund (EPF) and NPS has been discussed since 2016 but has not been implemented, with the PFRDA advocating for competition between EPF and NPS.
• The PFRDA is addressing concerns about annuities by creating a completely transparent pension payout product to provide competition and better pricing.

Key Concepts Involved:

• National Pension Scheme (NPS): A defined contribution pension system in India, allowing subscribers to contribute regularly into a pension account during their working life.
• Old Pension Scheme (OPS): A pension system where retirees receive a fixed percentage of their last drawn salary as pension, funded from the government's annual budget.
• Atal Pension Yojana (APY): A government-backed pension scheme targeted at the unorganized sector, providing a guaranteed minimum monthly pension after the age of 60.
• Assets Under Management (AUM): The total market value of the investments that a financial institution manages on behalf of its clients or itself.