pop conference on nps
TRANSCRIPT
POP Conference on NPS9th May 2016
The Gulmohar, IHC, New Delhi
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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 or more of their populations aged 60 or over.
Source: United Nations Department of Economic and Social Affairs/Population Division 7, World Population Prospects: The 2015 Revision, Key Findings and Advance Tables
• 3.2 billion
2015
•901million
2030
•1.4 billion
2050
•2.1 billion
2100
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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 doesn’t start NOW.
The Need of the Hour- A multifold increase in pension coverage to private sector.
Indian Demographic Scenario
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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%, US-75%, 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
Indian Pension Sector Scenario
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Need for Retirement Planning and Role of NPS
NPS provides the solution for making a holistic retirement planning by making regular contribution during active working
life.
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
Features
Increasing life expectancy
Increase in nuclear families Necessity for adequate Income Replacement post active
working life Balanced and happy retirement life
6*- Central & State Government, CAB & SAB employees
Overall Status of NPS (All Sectors)
SectorsNo. Of Subscribers
(in lacs)Assets Under Management
(Rs. In Crores)
As on 31st
March 2015
As on 31st March 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 80,855.13 1,18,810.11 46.94
**- Includes Atal Pension Yojana subscribers
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Performance under NPS Private sector during the F.Y.2015-16
Model No. of Subscribers as on 31st March 2016 (No)
Growth during the last F.Y (%)
Contribution as on 31st march 2016 (Rs. In Crs.)
Growth during the last F.Y (%)
AUM as on 31st March 2016 (Rs. In Crs.)
Growth during the last F.Y (%)
All Citizen
2,15,372
147.13 1054.01 111.99
1272.88 114.29
Corporate
4,73,514
27.08 8010.48 66.86 9290.05 63.71
Total 6,88,886
49.78 9064.49 71.09 10562.93
68.50• Growth of 147.13 % in the subscriber registration under All 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%.
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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 - 29,817Total 86,774 215,372 148.20%
Analysis of Registration of All Citizen Subscriber
Sr NoPRAN Generation As on March 31, 2016
Tier I Tier II
1 PAN & Bank KYC Verification 11,202 2,791
2 Aadhaar 19,903 5,251 Total 31,105 8,042
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POP- SP Activation
2015 2016 Increase in No. of Active POP-SP During the
yearNo. of POP-
SPsNo. of
Active POP-SPs
% of Active POP-SP
No. of POP-SPs
No. of Active POP-
SPs% of Active
POP-SP
38,237 4183 10.94% 55,467 7,168 12.92% 2985 71.36%
POP-SP Activation Analysis
POP- SP Activation
POP Type2015 2016
No. of POP-SPs
No. of Active
POP-SPs
% of Active POP-SP
No. of POP-SPs
No. of Active
POP-SPs
% of Active POP-SP
PSB 30,598 1,261 4.12% 46,885 2,961 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%
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NPS All Citizen AnalysisRegion wise Distribution
30
28
12
10
29
33
29
29
Subscribers
Contribution
North & Central
East and North East
South & Others
West
All figures in % terms
NPS All Citizen AnalysisTop 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%
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NPS Corporate AnalysisCorporate Business from POPs
No. of Subscribers
under Corporate
model
No. of its own
employees as
Subscribers under
Corporate
% of own subscribers
No. of Subscribers
under Corporate
model
No. of its own employees as Subscribers
under Corporate
% of own subscribe
rs
2015 2015 2016 2016 PSBs 2, 83,070 278,631 98% 342,294 336,168 98%Non Bank 37,847 2,872 8% 64,883 3,163 5%Pvt Bank 30,554 17,871 58% 43,307 22,962 53%
Direct 21,802 21,802 100% 23,030 23,030 100%Total 373,273 321,176 86% 473,514 385,323 81% Growth in Subscribers Growth in Own
SubscribersPSBs 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)
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NPS Corporate AnalysisCorporate Business from POPs
No. of
Corporates Regd.
No. of Corporates Regd. With NIL Subs.
No. of Corporates Regd.
No. of Corporates Regd. With NIL Subs.
Growth of No. of Corporates
Regd.
2015 2015 2016 2016PSBs 166 55 199 52 21%Non Bank 928 370 1,522 498 71%Pvt Bank 504 160 639 173 42%Direct 10 - 10 - -Total 1608 585 2370 723 47.39%
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NPS Corporate AnalysisMandatory & Voluntary
Corporates
2014 No. of Subscribers 2015
No. of Subscriber
s2016
No. of Subscriber
sMandatory Corporates 56 239,560 60 326,620 60 396,015
Voluntary Corporates 1052 22,521 1548 46,653 2310 77,499 Total 1108 262,081 1608 373,273 2370 473,515
2014% of Total
Subscribers
2015% of Total
Subscribers
Growth over Prev.
period2016
% of Total
Subscribers
Growth over Prev.
periodMandatory Corporates 56 91% 60 87% 36% 60 84% 21%
Voluntary Corporates 1052 9% 1548 13% 107% 2310 16% 66%
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NPS Corporate AnalysisRegion wise Corporate
Distribution23
15
14
6 10
16
46
41
43
25
34
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No. of Corporates
Subscribers
Contribution
North & Central
East and North East
South & Others
West
All figures in % terms
NPS Corporate ModelTop 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%
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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 upto Rs. 50000/-(Under Sec. 80CCD(1B). Exclusive for NPS.
Tax Benefits
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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.
Budget Announcements and Benefits
Comparison of Superannuation and NPS
Particulars National Pension System (NPS)
Approved Superannuation Fund (ASAF)
Limit of contribution by Employee for tax purpose
10% of Basic + DASubject to Maximum of Rs. 1.50 Lacs Additional tax deduction available on contribution upto Rs. 50000/- (Exclusive for NPS)
Subject to Maximum of Rs. 1.50 Lacs
Employer's Contribution to the Fund for tax purpose
10% of Basic + DA (No Monetary Limit)
Not Taxable up to Rs. 1,00,000 per annum per employee.Above Rs. 1 lac, it is treated as perquisites in the hand of employee and taxed accordingly
Comparison of Superannuation and NPS
Particulars National Pension System (NPS)
Approved Superannuation Fund (ASAF)
Amount to be utilised for purchase of Annuity
Minimum 40% of the accumulated corpus.However, subscriber can utilise higher corpus also.
Limit on Lump sum withdrawal. Rest to be utilised for annuity payment.
Lump sum Withdrawal
Maximum 60% of the corpus 40% of the corpus will be tax exempt from F.Y. 2016-17
1/3rd of the Corpus can be withdrawn in lump sum in case Gratuity is paid½ of the corpus can be withdrawn in case gratuity is not paid.
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Initiatives by PFRDA in Simplifying NPSAvailability 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 etcAvailability 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 optioneNPS (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 FacilityPartial withdrawal facility implemented.
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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
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Issues of POPs under selling NPS
Low activation of POP branches68 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.
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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.
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PFRDA NPS Information Desk
PFRDA NPS Information Desk
• PFRDA has instituted a NPS Information Desk with a toll free number – 1800-110-708 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.
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Automated Lead Generation through
PFRDA NPS Information DeskA 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 POP-SPs 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 press “Submit”.
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 NPSAdditional 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.
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Thank You