POP Conference on NPS

9th May 2016

The Gulmohar, IHC, New Delhi

Ageing Population- A point of

Concern?

Globally, population aged 60 or over is

the fastest growing
The population aged 60 or above is
growing at a rate of 3.26 per cent per
year.

In 2015, there are 901 million people

aged 60 or over, comprising 12 per cent
of the global population. (More than
10% in India)
Currently, Europe has the greatest
percentage of its population aged 60 or
over (24 per cent),
By 2050, all major areas of the world
except Africa will have nearly a quarter
Source: United Nations Department of Economic and Social Affairs/Population Division 7, World
or more of their populations aged 60 or
Population Prospects: The 2015 Revision, Key Findings and Advance Tables
over.

3.2 billion

Indian Demographic Scenario

By 2050, every fifth Indian will be 60 years old compared to one in 12

today.
There are nearly 100 million people aged 60 or more in India today.
The number will TRIPLE by 2050; Most of them financially insecure in
the sunset years if a social security net doesnt start NOW.
The Need of the Hour- A multifold increase in pension coverage to
private sector.

Indian Pension Sector Scenario

Formal Pension coverage to mere 12% of the population i.e. approx. 1

in every 8. Pension assets in India only 6% of GDP , Globally -58%, US75%, UK-95%,Aus-92%
Most of the formal pension coverage available to Government
employees.
For Corporate sector, mainly EPS under EPFO-1952 is available as
pension product, mandatory for the employees earning upto Rs.
15,000/- p.m. (Gratuity-1972, Superannuation-1961, PFRDA -2013)
Fiscal burden on Govt- 1999-2000-INR 251 bln, 2011-12-1215 bln
4

Need for Retirement Planning and Role of NPS

Increasing life expectancy
Increase in nuclear families
Necessity for adequate Income Replacement post active
working life
Balanced and happy retirement life

NPS provides the solution for making a holistic retirement

planning by making regular contribution during active working
life.
Features

Open for all (Between 18-60

years of age)
Portability
Low Cost structure
Flexibility

Tax Benefits
Market Linked Returns
Professionally Managed
Prudentially Regulated
Availability of Choices
5

Overall Status of NPS (All Sectors)

Sectors

No. Of Subscribers

Assets Under Management

(in lacs)

(Rs. In Crores)

As on 31st As on 31st
March
March
2015
2016

%
growt
h

As on 31st
March
2015

As on 31st
March 2016

%
growth

Govt.
sector*

41.42

45.82

10.62

72,980.65

1,05,633.30

44.74

Private
sector**

46.07

76.30

65.62

7,874.48

13,176.81

67.34

Total

87.49

122.12

39.58

*- Central & State Government, CAB & SAB

employees
**- Includes Atal Pension Yojana subscribers

80,855.13 1,18,810.11

46.94

Performance under NPS Private sector during the F.Y.2015-16

Model

No. of

Growt

Contrib

Growt

AUM as

Growt

Subscri

ution as

on 31st

bers as

during

on 31st

durin

March

durin

on 31st

the

march

g the

2016

g the

March

last

2016

last

(Rs. In

last

2016

F.Y (%)

(Rs. In

F.Y

Crs.)

F.Y

Crs.)

(%)

1054.01

111.9

(No)

147.13

(%)

All

2,15,37

1272.88

Citize

n
Corpor

4,73,51

27.08

8010.48

66.86

9290.05

63.71

ate
Total

4
6,88,88

49.78

9064.49

71.09

10562.9

68.50

114.2
9

6
Growth of 147.13
% in the subscriber registration under 3All Citizen Model
during the last F.Y. and 27.08 % under Corporate Model.
Contribution under the NPS- Private Sector increased by 71.09% during
last F.Y. whereas AUM increased by a healthy 68.50%.
7

Analysis of Registration of All Citizen

Subscriber
POP Type

2015

2016

Growth over
prev. year

PSBs

12,960

28,942

123.32%

Pvt Bank

11,728

29,086

148.00%

Non Bank

62,086

127,527

105.40%

eNPS

29,817

Total

86,774

215,372

PRAN Generation
Sr No
1
2

PAN & Bank KYC

Verification
Aadhaar
Total

148.20%

As on March 31, 2016

Tier I

Tier II

11,202

2,791

19,903
31,105

5,251
8,042

POP-SP Activation Analysis

POP- SP Activation
2016

2015
No. of
No. of POPActive POPSPs
SPs

38,237

POP Type
PSB

% of Active
POP-SP

4183

No. of
No. of POP% of Active
Active POPSPs
POP-SP
SPs

10.94%

55,467

7,168

POP- SP Activation
2015
No. of
% of
No. of POPNo. of
Active
Active
SPs
POP-SPs
POP-SPs POP-SP
30,598
1,261
4.12%
46,885

12.92%

Increase in No.
of Active POPSP During the
year

2985

71.36
%

2016
No. of
Active
POP-SPs
2,961

% of
Active
POP-SP
6.32%

Pvt Bank

4,606

1,249

27.11%

6,188

2,392

38.66%

Non Bank

3,033

1,673

55.16%

2,394

1,815

75.81%

Total

38,237

4,183

10.94%

55,467

7,168

12.92%

NPS All Citizen Analysis

Region wise Distribution
3
0

2
8

North & Central

1
2

2
9

1
0

East and North

East

3
3

West

All figures in %
terms
Subscribers

Contribution
2
9

2
9

South & Others

10

NPS All Citizen Analysis

Top 5 States

State Names

No. of Subscribers

Contribution

Maharashtra

20%

24%

Uttar Pradesh

10%

7%

Karnataka

10%

12%

Delhi

9%

11%

Tamil Nadu

8%

8%

NPS Corporate Analysis

Corporate Business from POPs

PSBs
Non
Bank
Pvt
Bank
Direct
Total

No. of its
No. of
own
No. of
No. of its own
Subscribers employees
Subscribers employees as % of own
% of own
under
as
under
Subscribers subscribe
subscribers
Corporate Subscribers
Corporate
under
rs
model
under
model
Corporate
Corporate
2015

2015

2, 83,070

278,631

37,847

2016

2016

98%

342,294

336,168

98%

2,872

8%

64,883

3,163

5%

30,554

17,871

58%

43,307

22,962

53%

21,802
373,273

21,802
321,176

100%
86%

23,030
23,030
473,514
385,323
Growth in Own

Growth in Subscribers
Subscribers
PSBs
20.92%
20.64%
Non Bank
71.43%
10.13%
Pvt Bank
41.74%
28.48%
Direct
5.63%
5.63%
Total
29.85%
19.97%
Own Subscribers- Corporates own employees as subscribers (eg. Bank
employees)

100%
81%

12

NPS Corporate Analysis

Corporate Business from POPs

No. of
Corporates
Regd.

No. of
No. of
Corporates
Corporat
Regd. With
es Regd.
NIL Subs.

No. of
Corporates
Regd. With
NIL Subs.

Growth of No.
of Corporates
Regd.

2015

2015

2016

2016

PSBs
Non
Bank
Pvt
Bank
Direct

166

55

199

52

21%

928

370

1,522

498

71%

504

160

639

173

42%

10

10

Total

1608

585

2370

723

47.39%

13

NPS Corporate Analysis

Mandatory & Voluntary
Corporates

2015

No. of
Subscriber
s

2016

No. of
Subscriber
s

239,560

60

326,620

60

396,015

1052

22,521

1548

46,653

2310

77,499

1108

262,081

1608

373,273

2370

473,515

2014

No. of
Subscribers

56

Voluntary Corporates
Total

Mandatory
Corporates

2014

% of
Total
Subscrib
ers

2015

Mandatory
Corporates

56

91%

60

87%

36%

60

84%

21%

Voluntary
Corporates

1052

9%

1548

13%

107%

2310

16%

66%

% of
Growth
% of
Growth
Total
over
Total
over
2016
Subscrib Prev.
Subscrib Prev.
ers
period
ers
period

14

NPS Corporate Analysis

Region wise Corporate
Distribution
2
1
1
3

North & Central

4
6

4
1

1
0

1
6

East and North

East

4
3

West
All figures in %
terms
No. of
Corporates
Subscribers

2
5

3
4

2
7

South & Others

Contribution

15

NPS Corporate Model

Top 5 States

State Names

No. of Corporates

No. of
Subscriers

Contribution

Maharashtra

41%

34%

37%

Karnataka

13%

19%

13%

Delhi

12%

10%

7%

Tamil Nadu

7%

8%

7%

Haryana

6%

2%

2%

Tax Benefits
To Employers
Contributions made by the employer (upto 10% of Basic + DA) is allowed as
a business expense under Section 36 (1) iv (a) of Income Tax Act 1961.

To Employees/ Self employed

Employees own contribution is eligible for tax deduction under sec 80 CCD
(1) of Income Tax Act up to 10% of salary (Basic + DA). This is within the
overall ceiling of Rs. 1.50 Lacs under Sec. 80 CCE of the Income Tax Act.
Employee also gets tax deduction for the contribution made by the employer
under section 80 CCD (2) of IT act upto 10% of salary (Basic + DA)which is in
addition to the tax benefits available under Sec. 80 CCE.
Additional Tax benefit on investment
80CCD(1B). Exclusive for NPS.

upto

Rs.

50000/-(Under

Sec.
17

Budget Announcements and

Benefits
Budget 2016-17 Announcements and resultant Benefits
Allowing 40% of the NPS corpus tax exempt on lump sum withdrawal.
Waiving service tax on the NPS corpus utilized for purchase of annuity.
The amount receivable by the nominee in case of death of the NPS subscriber has
been made tax exempt.
One time portability without any tax implication has been allowed to the
subscriber for shifting from recognized provident fund to National pension System.

One time portability without any tax implication has been allowed to the
subscriber for shifting from superannuation fund to National Pension System.

18

Comparison of Superannuation and

NPS
National Pension System

Particulars

(NPS)

Approved
Superannuation Fund
(ASAF)

10% of Basic + DA
Limit

of Subject to Maximum of Rs. 1.50

contribution

by Lacs

Subject to Maximum of

Employee for tax Additional tax deduction available Rs. 1.50 Lacs
purpose

on contribution upto Rs. 50000/(Exclusive for NPS)

Not Taxable up to Rs.
1,00,000 per annum per

Employer's
Contribution to
the Fund for tax
purpose

10% of Basic + DA
(No Monetary Limit)

employee.
Above Rs. 1 lac, it is
treated as perquisites
in

the

employee

hand
and

of
taxed

Comparison of Superannuation and

NPS
National Pension System

Particulars

Amount

to

utilised
purchase

(NPS)

Approved
Superannuation Fund
(ASAF)

be Minimum 40% of the accumulated Limit

for corpus.

on

higher corpus also.

sum

withdrawal. Rest to be

of However, subscriber can utilise utilised

Annuity

Lump
for

annuity

payment.
1/3rd of the Corpus can be

Lump
Withdrawal

sum

Maximum 60% of the corpus

40% of the corpus will be tax
exempt from F.Y. 2016-17

withdrawn in lump sum in

case Gratuity is paid
of the corpus can be
withdrawn

in

gratuity is not paid.

case

Initiatives by PFRDA in Simplifying

NPS

Availability of NPS Calculator on NPS Trust website

It helps in giving an approximate value of corpus based on the variables such as

age, returns expected, amount of contribution etc

Availability of NPS Scheme Returns Calculator

It helps in comparing the performance of all the PFMs in a particular scheme which
can help subscriber to make choices of PFM as well as Investment option

eNPS (Online NPS Platform)

Introduction of online platform for opening of NPS account and making
contribution, for both Residents and Non-residents. Success of this platform shows
that making available online platform by POPs will help them in garnering more
business.

Making withdrawal online

Online Processing of Exit Request of the Subscriber has been made mandatory
from 1st April 2016.

Partial Withdrawal Facility

Partial withdrawal facility implemented.

21

Role of POPs under NPS

To offer advice on NPS to the prospects and to facilitate opening of NPS
accounts
To facilitate corporates for registration with CRA
To disseminate information about NPS
To accept contributions from subscribers and timely remit the same
To accept service request from the subscriber and to act on them
To redress the grievances of the subscribers
To process exit and withdrawal request

22

Issues of POPs under selling NPS

Low activation of POP branches
68 entities (38 Banks and 30 Non-Banks) are presently registered as POP.
55645 branches of POPs are registered as POP-SP for offering NPS. However,
only 7490 branches are presently active (13.46%)

Lack of focused approach

Not making any business plan for NPS or not following for the achievement of
the business plan. Targets to the branches are not being assigned. ( selection
of POP by corporate depends on service levels , TAT, geographical coverage,
Brand name , relationship with the organisation)

Lack of awareness about NPS amongst the employees of POPs

Despite approx. 40% of the Public Sector bank staff mandatorily covered
under NPS, awareness about NPS is not upto the expected level.
23

Initiatives by PFRDA to Facilitate

POPs
PFRDA has engaged training agency to impart training to at least one staff
from each branch.
Training will be scheduled and organized at district headquarter level.
Participation required from all registered branches as POP-SP.
NPS Module in line of APY to be developed and integrated with core banking of
POP. PRAN generation would be instantaneous.
Automated lead generated at NPS Information Desk will be forwarded to the
concerned POP.
Institution of awards for recognizing the performance of the POP and its
branches.

24

PFRDA NPS Information

Desk
PFRDA NPS Information Desk
PFRDA has instituted a NPS Information Desk with a toll free number 1800-110708 with English and Hindi language capabilities at the moment. The language
capabilities can be increased based on caller response.
The helpdesk is operational all round the year (except National Holidays) from 0930
AM to 0530 PM.
Short code SMS service NPS to 56677 is also in operation.
The helpdesk provides prospective and existing subscribers information in respect
of NPS, the different models, features, benefits, active POPs & Banks, Bank branch/
POP-SP locations etc.
With an average handling time of approx. 6 mins per call, presently the Helpdesk
has capabilities of handling 1600 calls a day, which can be scaled up if required.

25

Automated Lead Generation

through
PFRDA NPS Information Desk
A prospect would give details of the State from
which he/she is calling or where he/she wishes to
open his/her account.
Upon providing state detail, the list of all Pincodes
where POP-SPs are available will be populated
Upon providing the specific Pincode, only the POPSPs active in that area will be populated
The prospect would select a particular POP; all the
POP-SPs active in the said Pincode area would be
populated.
The lead would be forwarded to POP Nodal officer
for the prospect through a standard email and
initiate action on the details (name, mobile no.,
place etc. will be part of email body copy).

The Nodal officer is expected to press the hyperlink

(presented in the Lead Forwarding mail) and select the
action from the list available on the drop down menu and 26

Opportunities and Way ahead for

POPs
With option of portability from Superannuation Fund to NPS without
any tax implication, many corporates and employees would like to
shift to NPS
Additional Tax benefits, structure and choices available under NPS
compares favorably than superannuation fund. POPs should target
corporates more vigorously.
Focus on facilitating new corporates for registration.
Increase in the subscriber registration of the corporates who have
already registered for NPS.
Activation of all branches in a time bound manner.
Focused approach for NPS. Monitoring of the progress by Nodal Office.
Advising branches to actively participate in NPS Login day and NPS
Login Week.
Sprucing up activities NPS for the NRI segment.

Thank You

28