Officials from the Pension Fund Regulatory and Development Authority (PFRDA) have emphasized that investing in the National Pension Scheme (NPS) is a crucial step towards ensuring a financially secure and dignified life after retirement. This message was central to a recent awareness session held in Mangaluru.
NPS Opens Doors for Gig Economy Workers
During a session titled 'Retire Smart India', organized by PFRDA in association with TOI and Vijay Karnataka, Ismail Salam M of PFRDA made a significant announcement. He clarified that the National Pension Scheme is no longer restricted to government employees or corporate workers. The scheme has been expanded, and now even gig workers can enroll to build their retirement corpus.
He explained that the government's push for NPS is partly driven by increasing life expectancy due to medical advancements. "An individual on an average in India lives for 74 years. One can use the amount after retirement," he stated, underscoring the need for long-term planning.
Understanding the NPS Framework and Growth
Another PFRDA official, Samarth Hegde M, provided detailed insights into the scheme's mechanics and reach. He pointed out that the government is actively concerned about the financial security of India's ageing population. Hegde informed the audience that an NPS account can be opened at any bank, and subscribers can choose from about ten different pension fund managers.
He also highlighted the introduction of NPS Vatsalya, a scheme designed specifically for those below the age of 18, allowing for early investment. The official outlined the two main account tiers:
- Tier 1: The primary retirement account with withdrawal restrictions to ensure corpus accumulation.
- Tier 2: A voluntary savings account that offers more flexibility with no withdrawal restrictions.
Sharing compelling data, Hegde revealed that as of November 23, 2025, a total of 912 lakh (91.2 million) people have subscribed to NPS. In the last financial year alone, 12 lakh new subscribers joined, and the current fiscal year has seen 9 lakh new enrollments so far. "However, India has a long way to go compared to other countries," he added, indicating room for greater adoption.
Investment Choices and Tax Advantages
Hegde detailed the investment options available within NPS, which allow subscribers to tailor their portfolio based on risk appetite:
- Equity: Offers a historical return of 13.2%.
- Corporate Bonds: Have provided a return of 8.5%.
- Central Government Bonds: A more conservative debt option.
Further enhancing the scheme's appeal, Sriram V Rao, a partner at Nitin J Shetty and Co, explained the various tax benefits associated with NPS investments. These benefits under different sections of the Income Tax Act make it a highly efficient vehicle for retirement savings.
The session ultimately served as a comprehensive guide, providing in-depth awareness about NPS, smart retirement solutions, and practical ways for both individuals and organizations to build long-term financial resilience.
