2018|Jul 2018|Aug 2018|Sep 2018|Oct

2018|Jan Edition focused on “Digitalization under NPS” 2018|Feb 2018|Mar

2018|Apr

2018|May Pension Bulletin 2018|Jun Volume VII Issue VII 2018|Jul 2018|Aug 2018|Sep 2018|Oct

2018|Nov Pension Fund Regulatory and Development Authority 2018|Dec Chhatrapati Shivaji Bhawan, B-14/A,Qutab Institutional Area, Katwaria Sarai, New Delhi-110016

Digitalization under NPS : e-NPS, Mobile application etc.

Digitalization is the use of digital technologies to provide new and value- producing opportunities; it is the process of moving to a digital era.

Provides much easier access to NPS account

Index

Section 1: Digitalisation under NPS:...... 4 Section 2: NPS Statistics...... 11 i) Sector wise growth ...... 11 ii. Overall Status of State Governments ...... 16 iii. UoS Sector (All citizens) in NPS: ...... 17 iv. Total amount of subscribers’ contribution under UoS (Tier-I & Tier II): ...... 18 v. Total amount of AUM under UoS (Tier-I & Tier II) ...... 18 vi. Total number of corporate, subscriber, contribution & AUM registered in Corporate Sector: ...... 19 vii. Status of APY: ...... 20 viii. PFM wise Total Assets on NPS schemes ...... 20 ix. PFM wise Return on NPS Schemes...... 21 x. Performance of NPS Schemes of Central Government & State Government Employees ...... 22 xi. Performance of NPS schemes for Unorganized/Private Sector ...... 22 Section 3: Age-wise/Month wise analysis for the PRAN Generated under NPS ...... 26 Section 4: Circulars/Advisory/Notifications/Guidelines etc. Section: ...... 29 Section 5: Press Release Section ...... 35 Section 6: International Section ...... 36 Section 7: Financial Literacy ...... 39 i) Questions to ask when one sits for Planning...... 39 ii) The Importance of Planning ...... 41 iii) Being too Risk averse can also be risky ...... 43 Section 8: Macro-Economic Statistics ...... 46

Section 1: Digitalisation under NPS: Digital India is an initiative launched by the Government of India to ensure that services are made available to citizens electronically by improving online infrastructure and by increasing Internet connectivity.

PFRDA has been pursuing the development and operationalization of online transaction facilities for the prospective as well as existing subscribers of NPS. Towards this end, an online platform for registration of subscribers and receipt of contribution under National Pension System(eNPS) through NPS Trust at www.npstrust.org.in has been developed. Apart from that several other initiative were undertaken as under:

1. eNPS platform: To drive efficiencies and improve ease of access to NPS for the subscribers and providers alike e-NPS, a convenient online based subscriber registration and contribution facility for NPS has been provided for the existing and potential subscribers. e-NPS facilitates opening of Individual Pension Accounts under NPS and making initial and subsequent contribution to the Tier I as well as Tier II account online. This feature also enables the subscribers to change their Pension Funds, Asset Class, Allocation Ratio, and Scheme Options after authentication. Through this platform a prospective subscriber can register for NPS; contribute to his/her Permanent Retirement Account. Further, the subscribers who already have an NPS account can make contributions through eNPS directly.

A prospective subscriber can visit NPS Trust website www.npstrust.org.in and select NPS Online menu to register and contribute to NPS.

In order to comply with the new UIDAI guidelines for Virtual ID, paperless facility of e-Sign has been disabled for PRANs generated prior to July 1, 2018. You may submit the physical registration form to CRA which can be downloaded by selecting Print & Courier Subscriber Registration Form.

➤ Opening of Individual Pension Account under NPS (only Tier I / Tier I & Tier II) by All Indian Citizens (including NRIs) between 18 - 65 years

➤ Making initial and subsequent contribution to your Tier I as well as Tier II account

For Account opening, one need to:

✔ Have Mobile number, email ID and an active Bank account with net Banking facility enabled

✔ Have an Virtual ID number (issued by UIDAI against your Aadhaar Number ) or a PAN Card

✔ In case, an applicant selects to open the individual pension account with PAN, the activation of the PRAN is subject to KYC verification by the empanelled Banks (name and address should match with bank record) selected by applicant during the registration process.(not required in case of Virtual ID).

✔ Fill up all the mandatory details online

✔ Click here for guidelines on filling details if Applicant residence for tax purposes in jurisdiction (s) outside India. 4

✔ Scan and upload your photograph (optional if verification is done through Virtual ID)

and signature.

✔ Make online payment (Minimum amount of ₹ 500) .

✔ Print the form, paste photograph & affix signature and submit the Form to CRA.

All NPS subscribers can contribute in Tier I & Tier II account through 'eNPS' using SBI ePay and BillDesk. To view the list of Banks associated with SBI ePay, click here and BillDesk click here.

Any individual can open a pension account under NPS through eNPS using one of the following options

Option 1 - Registration using Virtual ID number (issued by UIDAI against your Aadhaar Number )

✔ You must have an 'Virtual ID' (VID number can be generated on UIDAI's website) .

✔ Your KYC in NPS will be done using Virtual ID through One Time Password (OTP) authentication

✔ OTP for the purpose of authentication will be sent to the mobile number registered with the Virtual ID.

✔ Your demographic details and photo will be fetched from Virtual ID database and populated in online form .

✔ You need to fill up all the mandatory details online .

✔ You would be required to upload your scanned signature (in *.jpeg/*.jpg format having file size between 4kb - 12kb) as part of the registration process.

✔ In case, you wish to replace the photo obtained from Virtual ID, you may upload a scanned photograph .

✔ You will be routed to a payment gateway for making the payment towards your NPS account from Debit/ Credit card or Internet Banking .

Option 2 - Registration using PAN (KYC verification by Bank)

✔ You must have a 'Permanent Account Number' (PAN)

✔ Bank account with the empanelled Bank for KYC verification for subscriber registration through eNPS

✔ Your KYC verification will be done by the Bank selected by you during the registration process.Name and address provided during registration should match with bank records for KYC verification. If the detail don't match , the request is liable for rejection.In case of rejection of KYC by the selected Bank, applicant is requested to contact the Bank 5

✔ You need to fill up all the mandatory details online

✔ You need to upload your scanned photograph and signature in *.jpeg/*.jpg format having file size between 4kb - 12kb

✔ You will be routed to a payment gateway for making the payment towards your NPS account from Internet Banking

In addition, NRI subscribers should,

✔ Select the Bank Account Status i.e., Non-Repatriable account or Repatriable account

✔ Provide the NRE/NRO bank account details and upload scanned copy of passport

✔ Select the preferred address for communication i.e., Overseas Address or Permanent Address (communication at overseas address would entail extra charges)

After Permanent Retirement Account Number (PRAN) is allotted, subscriber can use one of the following options:

Option 1 - eSign

For Tier I PRANs generated through Virtual ID (issued by UIDAI against your Aadhaar Number), you have option to eSign the document by following the below mentioned steps:

✔ Select 'eSign' option in the eSign / Print & Courier page

✔ OTP for the purpose of authentication will be sent to your mobile number registered with the Aadhaar

✔ After Authentication of Virtual ID, Registration form will be successfully eSigned

✔ Once a document is eSigned, you need not send the physical copy of form to CRA

✔ eSign charge ₹ 5 plus GST

Option 2 - Print and Courier

✔ Select 'Print & Courier' option in the eSign / Print & Courier page

✔ Subscriber need to take a printout of the form, paste your photograph (please do not sign across the photograph) & affix signature

✔ Subscriber should sign on the block provided for signature

✔ The photograph should not be stapled or clipped to the form

✔ The form should be sent within 90 days from the date of allotment of PRAN to CRA at the following address or else the PRAN will be 'frozen' temporarily

Central Recordkeeping Agency (eNPS) NSDL e-Governance Infrastructure Limited, 1st Floor, Times Tower, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013

Processing of subsequent contribution:

All existing subscribers (registered through both online and offline mode) can contribute in Tier I & Tier II account using 'eNPS'. To contribute online, you need to

✔ Have an active Tier I / Tier II account

✔ Authenticate your PRAN using the OTP sent to your registered mobile number

✔ Pay through your Debit / Credit card or use Internet Banking option.

✔ POP Service Charges will be applicable on the contribution amount @ 0.10% (subject to minimum of ₹ 10 and maximum of ₹ 10,000 per transaction). This service charges will not be applicable for subscribers registered in eNPS through Virtual ID

2. Mobile App NPS App: A Mobile App for NPS is available for the Subscriber’s in ‘Google Play Store’ as ‘NPS by NSDL e-Gov’ and ‘NPS by Karvy-CRA’. Subscribers can access their account through the NPS mobile application. The following new features are enabled in Mobile App to facilitate the subscriber’s interface with the system: a) Aadhaar can be linked to NPS account using Mobile App b) Grievances/queries under NPS can be raised through App. c) Status of grievance along with resolution details can be viewed d) Subscriber can reset his/her password using Mobile App through OTP. e) The bilingual version of Mobile App has been developed for convenience of NPS Subscriber. The Subscriber will have option to choose the desired language option (either English or Hindi) on accessing the Mobile App.

3. APY@eNPS platform: PFRDA in coordination with CRA-NSDL has developed the process to offer APY enrolment through eNPS platform for wider reach. eNPS platform has been already enabled for NPS subscription and this user friendly platform expanded to make subscription under APY in

a complete end to end digital environment without submission of physical form.

Processing of APY Application:

Any individual between 18 -40 years (39 years 364 days) can initiate opening an Atal Pension Yojana account through eNPS platform using following process:

Registration using Virtual ID (issued by UIDAI against your Aadhaar Number)

✔ Subscriber must have an 'Virtual ID' (with a mobile number registered with Aadhaar)

✔ Select the bank where you have an existing saving bank account

✔ Enter savings bank account number for selected bank

✔ OTP for the purpose of authentication will be sent to the mobile number registered with the Aadhaar

✔ Subscriber need to fill up all the mandatory details online

✔ APY PRAN allotment will be subject to verification of details and upload of subscriber registration file by bank.

✔ APY registration through eNPS, first contribution is mandatory. Kindly keep a sufficient balance in your savings bank account to avoid rejection.

eSign the document

Request for APY through Virtual ID (issued by UIDAI against your Aadhaar number ), you have to eSign the document by following the below mentioned steps:

✔ Select 'eSign' option in the eSign.

✔ OTP for the purpose of authentication will be sent to your mobile number registered with the Aadhaar

✔ After Authentication of Virtual ID, Registration form will be successfully eSigned.

✔ Once a document is eSigned, you need not send the physical copy of form to CRA

✔ eSign charge ₹ 5 plus GST

4. APY App: A Mobile App for APY/NPS Lite subscribers were also made available for the convenience of the subscribers, this app enables the subscribers PFRDA has provided online facility to view Statement of Account and ePRAN card. Now, PFRDA has enabled mobile applications for empowering the subscribers to view Statement of Account and other details of their APY account. All APY customers who has smart phone can download NPS lite mobile applications from google store and install in their mobile phones for real time viewing of APY Accounts.

Also, Atal Pension Yojana subscribers can go online

ü View and Print ePRAN card. ü View and Print Statement of Transactions.

Steps to go online?

Ø Visit APY section in www.npscra.nsdl.co.in. Ø Log in through two option: o With PRAN details o Without PRAN details. Ø Enter your Bank account number / Date of Birth and login.

5. Register your grievances online:

Online Registration of Grievances related to Atal Pension Yojana/Swavalamban scheme on https://npslite-nsdl.com/CRAlite/grievanceSub.do. The subscriber may register the new grievance by providing PRAN details , if available, and also if not available. The grievances can be tracked through the PRAN number or through the Token number generated by the system after lodging the grievances. The grievances shall be governed by the Grievance Redressal Regulations of PFRDA.

6. Online surveys: The National Pension System (NPS) is one of the preferred retirement options in India, thanks to its low cost structure, transparency, hassle free operation, pension fund and investment pattern options and tax advantages. PFRDA, the regulator of NPS, is strongly committed to promote old age income security in the country. To collect the feedback from the subscribers, PFRDA has launched survey through web embedded platform. PFRDA in coordination with NSDL CRA has lauhced a survey on Annity Service provider. The link can be accessed through: https://www.npscra.nsdl.co.in/annuity- service-provider.php

Various other facilities such as:

✔ Update FATCA details ✔ Aadhaar Seeding ✔ Update Address (using Virtual ID) ✔ Update Email ID/Mobile number ✔ Reprint PRAN Card ✔ Change in Scheme Preference ✔ Tier II Withdrawal ✔ View Account Details/Transaction Statement

Section 2: NPS Statistics i) Sector wise growth The total number of subscribers under NPS &APY increased from 220.33 lakh at the end of May, 2018 to 224.37 lakh at the end of July, 2018, and has recorded a growth of 1.83% in a month. The total subscribers under Govt Sector has increased to 59.21 Lakh and on year on year basis has recorded a growth of 11%, whereas the total number of subscribers registered under Private Sector (Corporate +All Citizen) is 14.47 lakh and has recorded year on year growth of 31%. The NPS Lite +APY has recorded a year on year growth of 47% which is highest amongst the sector. The total number of subscribers under NPS Lite + APY has grown to 150.66 lakhs, out of which, APY has 106.79 lakh subscriber as on 31st July, 2018. The growth during the month of July, 2018 for Govt. Sector, Private Sector, NPS Lite & APY has been recorded as 0.56 %, 0.77% & 2.43% respectively. The overall year on year basis growth under NPS is recorded at 35%. (As on 31st July, 2018)

Number of Subscribers (in lakhs) Year/Month 31-Mar-16 31-Mar-17 31-Mar-18 31-May-18 30-June-18 31-Jul-18 Sector A. CG 16.58 17.89 19.22 19.38 19.45 19.51 B. SG 29.24 33.32 38.68 39.13 39.43 39.70 Govt. sec Total 45.82 51.21 57.90 58.51 58.88 59.21 (A+B) Govt. sec % 11 12 13 12 11 11 growth (YoY) C. Corporate 4.74 5.86 6.96 7.12 7.19 7.25 Sector D. All Citizen 2.15 4.39 6.91 7.13 7.17 7.22 (Corp+All 6.89 10.25 13.87 14.25 14.36 14.47 Citizen) Sec Total (C+D) (Corp+All 50 49 35 34 32 31 Citizen) Sec % growth (YoY) E. NPS Lite/ 44.80 44.29 43.95 43.91 43.89 43.87 Swavalamban F. APY 24.85 48.64 96.06 99.82 103.20 106.79 Subtotal (NPS 69.65 92.93 140.01 143.73 147.09 150.66 lite+APY) (E+F) (NPS lite+APY) 68 33 51 47 47 47 % growth (YoY) Grand Total 122.35 154.39 211.78 216.49 220.33 224.34 (A+B+C+D+E+F) YoY % of Growth 40 26 37 35 35 35

Chart No: 1. Number of Subscriber (in lakhs)

250 45 224.34 216.49 220.33 40 211.78 40 200 35 37 35 35 35 30 150 154.39 25 122.35 26 20

100 Y growth(in%) - o

15 - Y 10

No. ofSubscribers (inLakhs) 50 5 0 0 31-Mar-16 31-Mar-17 31-Mar-18 31-May-18 30-Jun-18 31-Jul-18

CG SG Corporate Sector All Citizen NPS Lite/ Swavalamban APY Grand Total YoY % of Growth

Chart no 2, depicts that APY has 48% and NPS Lite/Swavalamban has 19% share in the total number of subscribers under NPS. The Government Sector together the Central Govt. and the State Govt. has 27% share. All Citizen Sector and the Corporate sector subscribers make up for 6%.

Chart No: 2. % share of subscriber as on 31st July, 2018

Corporate All Citizen, 3% Sector, 3% NPS Lite/ Swavalamban, 19%

SG, 18%

CG, 9% APY, 48%

b). The contribution under NPS has accumulated to Rs. 2,03,057 crore by 31st July 2018. This is a growth of 2.28% over June, 2018. Corporate Sector & All Citizen Model (Private Sector) has the recorded the highest growth of 53% year on year, while the NPS-Lite & APY put together has recorded

growth of 52 % followed by Govt. Sector at 33% over a year. The total contributions under NPS has registered a year on year growth of 35% Table No: 2. Total Contribution (Rs. In crores) (as on 31st July, 2018) Total Contribution (Rs. In crore ) Year/Month 31-Mar-16 31-Mar-17 31-Mar-18 31-May-18 30-June-18 31-July-18 Schemes A. CG 36329 48452 62351 65148 66273 67573 B. SG 48007 67099 92809 97362 99884 102290 Govt. sec Total (A+B) 84336 115551 155159 162510 166157 169863 Govt. sec % growth 48 37 34 33 33 33 (YoY) C.Corporate Sector 8010 12131 17704 18697 19211 19670 D. All Citizen 1219 3025 5824 6374 6501 6644 (Corp+All Citizen) 9229 15156 23528 25071 25712 26314 Sec Total (C+D) (Corp+All Citizen) 74 64 55 55 54 53 Sec % growth (YoY) E. NPS Lite/ 1792 2119 2378 2430 2441 2453 Swavalamban F. APY 491 1751 3602 4023 4220 4427 Subtotal (NPS 2283 3870 5980 6453 6661 6880 lite+APY) (E+F) (NPS lite+APY) % 65 69 55 54 52 52 growth (YoY) Grand Total 95849 134577 184667 194034 198530 203057 (A+B+C+D+E+F) YoY % of Growth 50 40 37 36 35 35 Chart No: 3. Total Contribution (Rs. In crore)

250000 60 50 198530 203057 184667 194034 50 200000 40 40 150000 134577 95849 37 36 35 35 30 100000

20 Y Growth(in%) - o 50000 - 10 Y Contribution (Rs inCrore) 0 0 31-Mar-16 31-Mar-17 31-Mar-18 31-May-18 30-Jun-18 31-Jul-18

CG SG Corporate Sector All Citizen NPS Lite/ Swavalamban APY Grand Total YoY % of Growth

Chart no. 4 depicts that the share of contribution collection of the Government Sector (combined CG & SG) stood the largest at 84%, Corporate Sector and All Citizen/UoS make up for 10 % and 3% of total

contribution respectively. APY & NPS Lite put together has recorded 3% of the share percentage out of the total contribution collection.

Chart No: 4. % share of contribution in NPS as on 31st July, 2018

Corporate Sector, 10% All Citizen, 3% NPS Lite/ Swavalamban, 1% SG, 50% APY, 2%

CG, 34%

c). The Assets Under Management (AUM) of NPS stands at Rs 2,55,397 crores as on 31st July, 2018, against the figure of Rs 2,46,813 crores at the end of June, 2018. The total AUM of NPS has grown by 3.48%. The monthly growth records an increase of 6.05% in the AUM under APY, followed by Corporate Sector at 4.04%. Year on year basis Govt Sector put together (CG+SG) has recorded a growth of 26%, APY+NPS Lite has shown the growth of 43% & Private Sector has recorded a growth of 44%. Overall, year on year, growth is recorded at 28%.

AUM (Rs. In crore ) Year/Month 31-Mar-16 31-Mar-17 31-Mar-18 31-May-18 30-June-18 31-July-18 Sector A. CG 48135 67040 84954 87099 88315 91005 B. SG 57498 84917 115679 119233 121857 126220 Govt. sec Total 105633 151957 200633 206332 210172 217225 (A+B) Govt. sec % 45 44 32 28 26 26 growth (YoY) C. Corporate 9290 14953 21378 22342 22882 23807 Sector D. All Citizen 1273 3126 5744 6262 6344 6630 (Corp+All 10563 18079 27122 28604 29226 30437 Citizen) Sec Total (C+D) (Corp+All 69 71 50 47 44 44 Citizen) Sec % growth (YoY) E. NPS Lite/ 2108 2639 3006 3,031 3041 3096 Swavalamban F. APY 506 1885 3818 4,179 4374 4639 Subtotal (NPS 2614 4524 6824 7210 7415 7735 lite+APY) (E+F) (NPS lite+APY) 63 73 51 46 43 43 % growth (YoY) Grand Total 118810 174561 234579 242146 246813 255397 (A+B+C+D+E+F) YoY % of Growth 47 47 34 31 28 28

Chart No: 5. AUM (Assets under Management).

300000 50 47 47 255397 246813 45 234579 242146 250000 40 35 200000 174561 34 30 31 150000 118810 28 28 25 20 Y Growth(In%) 100000 - o

15 - AUM (RsinCrore) Y 10 50000 5 0 0 31-Mar-16 31-Mar-17 31-Mar-18 31-May-18 30-Jun-18 31-Jul-18

CG SG Corporate Sector All Citizen NPS Lite/ Swavalamban APY Grand Total YoY % of Growth

Refer Chart no. 6, the Government sector (SG+CG) contribution amounts to 85% of the total. This turns out to be Rs 2,17,225 crores out of the entire AUM of Rs 2,55,397 crores. The shares of Corporate Sector, All Citizen, NPS Lite/Swavalamban and APY are 9%, 3%,1, 2 respectively.

Chart No: 6. % share of AUM in NPS as on 31st July 2018 All Citizen, 3% NPS Lite/ APY, 2% Corporate Swavalamban, Sector, 9% 1%

CG, 36%

SG, 49%

ii. Overall Status of State Governments There are total 39.70 lakh subscribers under State Govt Sector with an AUM of Rs. 1.26 lakh crore. At present there are total 29 states who have extended the NPS for their employees, out of that 27 states have notified and implemented NPS for both State Govt employees and AIS (All India Service) employees. One state (Tamilnadu) have notified but implemented only for AIS employees. West Bengal has not notified but implemented for AIS employees. Tripura has recently notified NPS for the State Government Employees joining the services of state government on or after 01st July, 2018.

Chart No: 7. State government wise Number of subscribers in NPS (As on 31st July, 2018)

Total No. of Contribution State Subscriber M&B AUM Sl. No. Govt. (In Lakh) (Rs. In Crore) (Rs. In Crore) 1. Andhra Pradesh 1.75 5,902.77 7,311.67 2. Arunachal Pradesh 0.16 270.27 297.61 3. Assam 1.51 3,767.20 4,599.10 4. Bihar 1.46 4,415.45 5,495.79 5. Chandigarh** 0.11 486.97 613.59 6. Chhattisgarh 2.91 4,909.16 6,198.03 7. Goa 0.31 1,091.70 1,262.18 8. Gujarat 1.83 5,130.23 6,343.99 9. Haryana 1.37 5,092.06 6,418.75 10. Himachal Pradesh 0.84 2,994.77 3,431.58 11. J & K 1.15 2,457.27 2,972.20 12. Jharkhand 1.01 3,208.77 4,177.02 13. Karnataka 2.17 6,115.66 8,013.12 14. Kerala 0.97 1,206.27 1,339.71 15. Madhya Pradesh 4.41 8,854.71 10,912.94 16. Maharashtra 2.99 8,640.47 10,056.74 16

Total No. of Contribution State Subscriber M&B AUM Sl. No. Govt. (In Lakh) (Rs. In Crore) (Rs. In Crore) 17. Manipur 0.35 681.94 836.28 18. Meghalaya 0.11 219.78 256.27 19. Mizoram 0.07 138.57 155.83 20. Nagaland 0.18 273.75 298.68 21. Orissa 1.41 3,116.81 3,779.64 22. Puduchery** 0.13 578.85 723.71 23. Punjab 1.57 5,216.63 6,482.78 24. Rajasthan 4.00 11,780.77 14,689.84 25. Sikkim 0.12 331 404.55 26. Telangana 1.39 3,778.76 4,898.99 27. Uttarakhand 0.76 2,878.88 3,725.65 28. Uttar Pradesh 4.66 8,722.35 10,488.45 29. Tamil Nadu* 0.00134 10.13 11.11 30. Tripura 0.00043 2.72 2.82 31. West Bengal* 0.00284 15.68 21.68 Total 39.70 1,02,290.35 1,26,220.30 *Executed agreement with CRA and NPS trust only for AIS officer. Tripura has recently notified for SG employees. ** Chandigarh and Puducherry status is included under the state government Status

iii. UoS Sector (All citizens) in NPS: As on 31st July 2018, there are 74 Points of Presence (PoPs) and 79,833 service providers (PoP-SP) registered with PFRDA to provide NPS services to the citizens. Post March, 2018, 192 fresh POP-SPs has been registered in the system. The private and the unorganized sector employees are serviced through the PoPs which comprise of banks & non-banking finance companies while the registration and contribution upload of Government and Government bodies employees is done by their respective Pay & Account offices.

Table No: 4. Total number of PoP & PoP-SP in CRAs

Particulars Mar-16 Mar-17 Mar-18 May-18 June-18 July-18 Total number of registered PoPs in CRA 70 76 72 72 72 74 Total number of registered PoP-SP in CRA 55,580 69,005 79,641 79,812 79,824 79,833

As on 31st July, 2018 there are 7. 22 lakh accounts of All Citizen Model subscribers under Tier I. It has registered a growth of 0.56% during the month. At the end of July,18, there are 1.54 lakh numbers of Tier II Account subscribers, it has recorded 1.98% increase during the month.

Chart No: 8. Total number of account subscriber (UoS) in CRA under Tier-I & Tier-II

8.00 7.22 6.91 7.13 7.18 7.00 6.00 5.00 4.00 3.00

2.00 1.41 1.48 1.51 1.54

No ofSubscribers (InLakhs) 1.00 0.00 Mar-18 May-18 Jun-18 Jul-18

Tier I Tier II

iv. Total amount of subscribers’ contribution under UoS (Tier-I & Tier II): The contribution to Tier-I under UoS (All citizens) has increased from Rs. 5848 crore as the end of June, 2018 to Rs 5972 crore as the end of July, 2018 and recorded growth of 2.12% during the month. The contribution received under Tier II has recorded a growth of Rs. 19 crore, it has registered 2.90 % of increase at the end of July, 2018. Chart No: 9. Contribution of subscribers under (UoS) in NPS under Tier-I &Tier-II (Rs. in crores)

7,000 5,848 5,972 6,000 5737 5,235 5,000

4,000

3,000

2,000

Contribution (Rs inCrore) 1,000 589 637 653 672

0 Mar-18 May-18 Jun-18 Jul-18

Tier I Tier II

v. Total amount of AUM under UoS (Tier-I & Tier II) The AUM for UoS Sector under Tier- I as on 31st July, 2018 stood Rs. 6003 crores against the AUM of Rs. 5742 crore as end of June, 2018 thereby has shown growth of 4.54%. The AUM of Tier-II has increased from Rs. 602 crore as end of June, 2018 to Rs. 627 crore at the end of July, 2018 and hence recorded a growth of 4.15% during the month.

Chart No: 10. AUM of individual subscriber (UoS) in NPS under Tier-I & Tier-II (Rs. In crore)

7000 6003 6000 5665 5742 5183 5000

4000

3000

AUM (RsinCrore) 2000

1000 561 597 602 627

0 Mar-18 May-18 Jun-18 Jul-18

Tier I Tier II vi. Total number of corporate, subscriber, contribution & AUM registered in Corporate Sector: As on 31st July, 2018, there are 4975 corporates registered under NPS. In current fiscal year, the number of corporates registered under NPS has increased by 9.12% and in absolute terms, there are 416 new corporates adopted NPS. The number of subscribers with these corporates stood at 7.25 lakhs with AUM of Rs 23,807 crores by the end of July, 2018.

Table No: 5. Total number of corporate registered in (NPS) Corporate Sector:

Mar-18 Apr-18 May-18 June-18 July-18 4559 4649 4770 4871 4975

Chart No: 11. Total number of subscribers, contribution & AUM registered in Corporate Sector

25000 7.30 21378 22342 22882 23,807 19211 20000 17704 18697 19670 7.25 7.20 15000 7.12 7.19 7.10 10000 7.00

5000 6.96 6.90 0 6.80 Mar-18 May-18 Jun-18 Jul-18

Contribution Amount in Corporate Sector (Rs in Crore) Total AUM in Corporate Sector (Rs in Crore) Total Number of Subscribers Registered in Corporate Sector(in lakhs)

vii. Status of APY: There are currently 235 active APY Service Providers registered with PFRDA, which includes Banks & Deptt of Post. The subscriber base of Atal Pension Yojana has reached 106.79 lakhs as on 31st July, 2018, which was 96.05 lakhs at the end of March 2018. AUM under APY has increased to Rs. 4639 crores, while its contributions stood at Rs 4427 crores as on 31st July , 2018. Table No. 10. No. of Registered (Active) APY SPs Mar-18 Apr-18 May-18 June-18 July-18 Total no. of 233 233 233 233 235 active APY- SPs under APY Chart No: 12. Total number of subscriber, contribution & AUM registered in APY

5000 4639 110.00 4427 4220 4374 4500 4023 4179 108.00 3818 106.79 4000 3602 106.00 3500 104.00 103.20 3000 102.00 2500 99.82 100.00 2000 98.00 1500 96.05 96.00 1000 94.00 500 92.00 No. ofSubscribers(InLakhs) Contribution & AUM(RsInCrore) 0 90.00 Mar-18 May-18 Jun-18 Jul-18

Contribution AUM Subscribers viii. PFM wise Total Assets on NPS schemes

Table No: 7. Pension Fund wise Assets under Management

(as on 31st July, 2018) (Rs in Crore) PFs Mar-18 Apr-18* May-18 June-18 July-18 SBI 89283 90402 91973 93754 96825 LIC 70130 71142 72294 73602 76166 UTI 69483 70457 71665 73073 75657 Kotak 536 561 569 574 598 ICICI 2326 2431 2466 2500 2621 Reliance 231 238 238 240 248 HDFC 2560 2773 2901 3024 3227 Birla 30 36 40 46 55 Total 234579 238040 242146 246813 255397 Source: NPST. Website: www.npstrust.org.in *As on 27th April, 2018

Table No: 8. Scheme wise Assets under Management (As on 31st July, 2018) (Rs in crore) Assets under Management (Rs in crores) Total Assets Mar-18 Apr-18 May-18 June-18 July-18 (Rs. In crore) Scheme↓ CG 84955 85832 87099 88315 91004

SG 115989 117511 119549 122177 126549 Corporate CG 3006 15066 15401 15747 16284 A 6 8 8 8 9 E 4308 4737 4829 4883 5261 TIER I C 2847 2919 2986 3074 3176 G 4243 4356 4466 4593 4751 NPS Lite 14846 3031 3031 3041 3096 E 218 238 242 243 260 TIER II C 162 165 168 169 173 G 181 185 188 190 195 APY 3818 3992 4179 4374 4639 Total 234579 238040 242146 246813 255397 Source: NPST. Website: www.npst.org.in ix. PFM wise Return on NPS Schemes Table No: 9. Returns since inception (in %) (As on 31st July, 2018) Pension Funds→ SBI LIC UTI ICICI RELIANCE KOTAK HDFC BIRLA CG 9.83 9.55 9.54 SG 9.38 9.53 9.49 Corporate-CG 9.45 9.48 A 6.96 6.53 6.79 6.45 6.49 6.77 7.77 6.90 E 10.53 13.63 12.47 12.44 11.23 11.66 16.99 18.60 TIER I C 10.35 9.78 9.17 10.36 9.09 10.28 9.95 7.57 G 9.22 10.33 8.01 8.36 8.00 8.22 9.13 3.19 E 10.24 9.65 10.65 10.26 10.06 10.37 13.66 18.35 TIER II C 9.96 8.47 9.24 10.19 8.85 9.06 8.70 5.23 G 9.30 10.53 8.88 8.45 8.19 8.02 9.58 0.20 NPS Swavalamban 10.15 10.03 10.14 10.03 APY 7.90 8.56 8.90 Source: NPS Trust

Source: NPST. Website: www.npst.org.in & PFM Dept. Central Government: 1-Apr-08 State Government: 25-Jun-09 Swavalamban: (SBI, LIC, UTI,): 4-Oct-10, (Kotak PF): 31-Jan-12 Corporate (Central Govt. Pattern): 5-Nov-12 Scheme – [E, C, G] (Tier-I) - (SBI, UTI, ICICI, RELIANCE, KOTAK): 1-May-09, (LIC): 23-Jul-13, (HDFC PF): 1-Aug-13 Scheme – [E, C, G] (Tier-II) - (SBI, UTI, ICICI, RELIANCE, KOTAK): 14-Dec-09, (LIC): 12-Aug-13, (HDFC PF): 1-Aug-13 Birla Sunlife Pension Fund has commenced operation under NPS in May 2017

x. Performance of NPS Schemes of Central Government & State Government Employees

Table No: 10. Performance: Scheme CG (As on 31st July, 2018)

SCHEME CG PFM Financial Year Return (%) Return (%) FY FY FY FY FY FY FY 1-Yr 2-Yr 3-Yr 5-Yr 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 LIC 5.8 12.06 5.93 18.96 5.99 13.22 5.85 1.92 6.40 8.22 10.22 SBI 5.81 12.75 3.92 19.38 6.47 13.13 6.08 1.95 6.40 8.37 10.05 UTI 5.52 12.26 5.04 18.58 6.24 13.64 6.25 2.29 6.75 8.56 10.25 Source: NPST. Website: www.npst.org.in

Table No: 11. Performance: Scheme SG (As on 31st July, 2018)

Scheme SG Financial Year return (%) Return (%) PFM FY FY FY FY FY FY FY 1-Yr 2-Yr 3-Yr 5-Yr 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 LIC 6.68 12.8 5.87 19.4 5.97 13.28 5.80 1.71 6.32 8.15 10.21 SBI 6.8 13.0 3.83 19.8 6.62 13.24 5.94 1.67 6.28 8.37 10.13 UTI 6.04 13.2 4.7 18.8 6.3 13.56 6.05 2.11 6.56 8.50 10.16 Source: NPST. Website: www.npst.org.in

xi. Performance of NPS schemes for Unorganized/Private Sector

Table No: 12. Performance: Scheme E- Tier I (As on 31st July, 2018) Scheme E- Tier I PFM Financial Year Return Return (%) FY FY FY FY FY FY FY 1-Yr 2-Yr 3-Yr 5-Yr 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 LIC 20.13 27.51 -7.91 21.23 8.29 9.44 12.41 9.26 13.70 SBI -7.18 8.24 20.68 28.37 -7.16 21.83 9.52 11.90 14.45 10.95 15.65 UTI -10.6 7.42 21.29 29.74 -6.72 22.93 10.39 13.18 14.44 11.64 16.34 ICICI -7.75 9.05 21.18 28.65 -7.37 21.42 9.28 12.01 14.31 10.57 15.90 KOTAK -10.2 11.52 19.48 28.41 -6.88 22.23 10.94 8.59 12.99 10.01 15.18 RELIANCE -10.5 7.75 20.2 28.3 -7.26 20.35 7.73 7.49 12.45 9.16 14.66 HDFC - - 32.09 28.63 -7.47 22.96 10.71 12.61 16.51 11.89 NA BIRLA ------9.22 15.63 - - - IDFC -9.32 ------

DSP - - 17.06 ------

Source: NPST. Website: www.npst.org.in

Table No: 13. Performance: Scheme E- Tier-II (As on 31st July, 2018)

Scheme E- Tier II Financial Year Return Return (%) PFM FY FY FY FY FY FY FY 1-Yr 2-Yr 3-Yr 5-Yr 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 LIC -1.85 21.46 -7.29 21.13 10.46 8.47 12.00 9.10 NA SBI -7.51 8.26 20.37 28.64 -7.13 21.59 8.51 12.07 14.48 10.95 15.70 UTI -10.74 7.63 20.51 31.04 -6.54 22.04 11.15 13.33 15.01 11.51 16.81 ICICI -10.41 9.79 21.14 28.66 -7.39 21.4 9.95 12.12 14.36 10.59 15.89 KOTAK -9.80 11.33 19.50 28.12 -6.67 21.94 11.08 8.45 12.90 9.95 15.03 RELIANCE -10.37 7.79 20.67 28.25 -7.22 20.26 9.04 7.86 12.72 9.37 14.87 HDFC - - 12.36 22.77 -7.17 23.31 11.77 12.62 16.66 12.34 NA BIRLA ------9.02 15.72 - - - IDFC -9.46 ------DSP - - 7.15 ------Source: NPST. Website: www.npst.org.in

Table No: 14. Performance: Scheme C- Tier I (As on 31st July, 2018)

Scheme C- Tier I Financial Year Return Return (%) PFM FY FY FY FY FY FY FY 1- 2-Yr 3-Yr 5-Yr 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Yr LIC - - 11.44 15.43 15.43 11.64 5.94 1.25 5.87 7.90 9.83 SBI 11.07 14.27 5.24 15.7 8.72 11.96 6.40 2.14 6.45 8.21 9.72 UTI 10.19 13.41 6.14 15.09 8.83 12.04 6.00 1.93 6.28 8.13 9.62 ICICI 11.43 14.22 6.22 15.72 9.77 12.48 6.48 2.42 6.79 8.43 10.12 KOTAK 10.19 15.01 5.77 15.22 9.46 12.35 6.57 2.02 6.65 8.43 9.93 RELIANCE 8.13 13.89 6.89 15.04 9.12 11.99 6.37 2.32 6.61 8.31 9.79 HDFC - - 10.89 15.2 15.2 12.2 6.39 2.09 6.53 8.30 NA BIRLA ------9.18 5.31 - - - IDFC 9.15 ------DSP - - 10.57 ------Source: NPST. Website: www.npst.org.in

Table No: 15. Performance: Scheme C- Tier II (As on 31st July, 2018) Scheme C- Tier II Financial Year Return Return (%) FY PFM FY FY FY FY FY FY 2016- 1-Yr 2-Yr 3-Yr 5-Yr 2011-12 2012-13 2013-14 2014-15 2015-16 2017-18 17 LIC - - 6.51 12.37 8.26 12.31 5.49 0.94 5.61 7.83 NA SBI 10.7 12.69 4.15 15.62 8.6 11.73 6.23 2.20 6.47 8.14 9.66 UTI 11.4 12.95 5.75 15.3 8.57 11.65 6.11 2.14 6.22 8.01 9.56 ICICI 12.3 13.6 6.1 15.91 9.46 12.36 6.31 2.24 6.69 8.31 9.98 KOTAK 9.7 13.15 5.76 15.19 8.61 12.42 6.22 1.62 6.54 8.14 9.67 RELIANCE 7.86 12 6.04 14.97 8.8 11.96 6.86 2.39 6.71 8.21 9.78 HDFC - - 9.49 9.51 8.94 12.33 6.65 2.36 6.73 8.37 NA BIRLA ------6.47 3.91 - - - IDFC 10 ------

DSP - - 7.15 ------Source: NPST. Website: www.npst.org.in

Table No: 16. Performance Scheme G- Tier I (As on 31st July, 2018) Scheme G- Tier I Financial Year Return Return (%) PFM FY FY FY FY FY FY FY 1-Yr 2-Yr 3-Yr 5-Yr 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 LIC - - 8.57 20.93 6.50 14.31 5.55 -0.10 5.80 8.51 10.39 SBI 5.46 13.48 0.23 20.73 7.16 12.44 5.20 -0.35 4.62 7.84 9.29 UTI 3.75 13.57 0.93 20.18 7.16 11.66 4.25 -0.93 3.97 7.25 8.91 ICICI 6.07 13.84 1.51 20.75 6.97 12.18 5.17 -0.28 4.51 7.73 9.24 KOTAK 6.14 13.61 0.84 19.63 7.54 12.63 4.81 -1.20 4.22 7.79 9.07 RELIANCE 5.63 13.74 0.89 20.24 7.22 12.5 5.13 -0.82 4.46 7.77 9.21 HDFC - - 5.05 19.88 6.77 12.23 4.65 -0.55 4.31 7.59 - Birla* ------3.96 -1.42 - - - IDFC 5.9 ------DSP - - 10.14 ------*Inception date 08.05.2017, Source: NPST. Website: www.npst.org.in

Table No: 17. Performance Scheme G- Tier II (As on 31st July, 2018) Scheme G- Tier II Financial Year Return Return (% ) PFM FY FY FY FY FY FY FY FY 1-Yr 2-Yr 3-Yr 5-Yr 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 LIC - - - 10.94 19.94 6.75 13.68 4.94 0.61 5.83 8.43 - SBI 11.82 5.31 13.47 0.39 20.57 7.28 12.55 4.79 -0.29 4.56 7.81 9.25 UTI 16.44 3.81 13.52 0.51 20.27 7.28 11.96 4.38 -0.9 4.11 7.44 9.01 ICICI 6.43 6.36 14.36 1.12 20.7 7.05 12.14 5.06 -0.33 4.47 7.73 9.18 KOTAK 6.4 5.37 12.86 1.18 19.9 7.66 12.41 4.66 -0.98 4.37 7.76 9.21 RELIANCE 4.68 5.76 13.68 0.87 20.44 7.37 12.36 5.13 -1.07 4.38 7.74 9.16 HDFC - - - 9.18 19.45 6.83 12.11 4.70 -0.60 4.22 7.53 - Birla ------NA -2.24 - - - IDFC 6 7.22 ------DSP - - - 6.85 ------Source: NPST. Website: www.npst.org.in

Table No: 18. Performance: Scheme NPS -Lite (As on 31st July, 2018)

Scheme NPS-Lite FY Return % Return (%)

FY FY FY FY FY FY FY PFM 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 1-Yr 2-Yr 3-Yr 5-Yr LIC 10.1 13.02 5.91 19.52 5.72 13.58 5.93 2.02 6.62 8.35 10.37 SBI 8.7 13.83 4.11 19.52 6.3 13.37 6.16 1.93 6.59 8.48 10.15 UTI 8.55 13.18 4.9 19.2 5.83 13.6 6.29 2.37 6.75 8.52 10.26 KOTAK 14.58 5.18 19.23 6.37 12.98 6.31 2.07 6.37 8.22 10.18 Source: NPST. Website: www.npst.org.in 24

Table No: 19. Performance: Scheme Corporate- CG (As on 31st July, 2018)

Scheme Corporate CG FY Return % Return (%) FY FY FY FY FY PFM 2013-14 2014-15 2015-16 2016-17 2017-18 1-Yr 2-Yr 3-Yr 5-Yr LIC 5.63 19.53 5.72 13.87 9.60 1.09 5.94 8.13 10.04 SBI 3.31 19.99 6.54 13.36 9.65 1.83 6.44 8.47 10.14 Source: NPST. Website: www.npst.org.in

Table No: 20. Performance: Scheme Atal Pension Yojana (As on 31st July, 2018)

Scheme Atal Pension Yojana Return FY Return % (%) FY FY FY PFM 2015-16* 2016-17 2017-18 1-Yr 2-Yr 3-Yr LIC 7.13 13.71 5.46 1.18 6.08 8.34 SBI 4.37 13.79 5.98 1.97 6.76 8.75 UTI 6.94 14.24 5.70 1.96 6.36 8.51 Source: NPST. Website(AR): www.npst.org.in *Absolute returns as the Inception date for Atal Pension Yojana is June 04, 2015

Table No: 21. Performance: Scheme A Tier I (As on 31st July, 2018)

Scheme A- Tier I Financial Year Return Return (% ) PFM FY 2017-18* 1-Yr 2-Yr 3-Yr LIC 6.71 6.97 - - SBI 9.76 7.24 - - UTI 6.82 7.04 - - ICICI 8.20 6.53 - - KOTAK 7.70 7.72 - - RELIANCE 6.87 7.06 - - HDFC 9.21 8.86 - - Birla - 7.00 - - IDFC - - - - DSP - - - - Source: NPST. Website: www.npst.org.in *Absolute returns as the Inception

Section 3: Age-wise/Month wise analysis for the PRAN Generated under NPS (Central Govt., State Govt., & Corporate sector)

Sep-17 Age Band Central Govt State Govt Non-Govt Total A- <18 Years - - - - B- 18-21 Years 1,252 1,734 84 3,070 C- 22-25 Years 4,421 8,084 2,651 15,156 D- 26-28 Years 2,345 7,762 1,805 11,912 E- 29-35 Years 2,057 15,425 1,867 19,349 F - >35 Years 1,587 14,863 2,727 19,177 Total 11,662 47,868 9,134 68,664 A- <18 Years - - - - Oct-17 B- 18-21 Years 2,077 1,310 114 3,501 C- 22-25 Years 5,894 6,125 2,419 14,438 D- 26-28 Years 2,456 5,764 1,735 9,955 E- 29-35 Years 1,826 11,215 1,603 14,644 F - >35 Years 1,662 10,215 2,421 14,298 Total 13,915 34,629 8,292 56,836 A- <18 Years - - - - Nov-17 B- 18-21 Years 1,150 1,475 106 2,731 C- 22-25 Years 4,404 6,872 2,756 14,032 D- 26-28 Years 2,390 7,699 2,114 12,203 E- 29-35 Years 2,247 15,358 2,005 19,610 F - >35 Years 1,450 15,426 2,829 19,705 Total 11,641 46,830 9,810 68,281 A- <18 Years - - - - Dec-17 B- 18-21 Years 731 1,280 89 2,100 C- 22-25 Years 3,132 7,962 1,501 12,595 D- 26-28 Years 1,672 10,920 1,122 13,714 E- 29-35 Years 1,240 24,733 831 26,804 F - >35 Years 1,631 19,150 951 21,732 Total 8,406 64,045 4,494 76,945 Jan-18 A- <18 Years - - - - B- 18-21 Years 586 1,471 63 2,120 C- 22-25 Years 3,029 8,487 1,379 12,895 D- 26-28 Years 1,736 9,582 1,201 12,519 E- 29-35 Years 1,287 18,369 1,453 21,109 F - >35 Years 1,021 14,404 2,276 17,701 Total 7,659 52,313 6,372 66,344 A- <18 Years - - - Feb-18 B- 18-21 Years 390 1,635 101 2,126 26

C- 22-25 Years 2,722 8,436 1,628 12,786 D- 26-28 Years 1,889 8,376 1,188 11,453 E- 29-35 Years 1,527 15,196 1,398 18,121 F - >35 Years 749 12,617 2,254 15,620 Total 7,277 46,260 6,569 60,106 Mar-18 A- <18 Years - - - B- 18-21 Years 770 1,797 127 2,694 C- 22-25 Years 3,133 9,069 2,764 14,966 D- 26-28 Years 2,284 8,810 2,402 13,496 E- 29-35 Years 1,958 14,332 3,298 19,588 F - >35 Years 1,037 12,027 4,193 17,257 Total 9182 46035 12784 68001 Apr-18 A- <18 Years - - - - B- 18-21 Years 773 1240 69 2,082 C- 22-25 Years 3110 6252 1066 10,428 D- 26-28 Years 2229 6153 902 9,284 E- 29-35 Years 1769 9740 1471 12,980 F - >35 Years 866 9305 1918 12,089 Total 8,747 32,690 5,426 46,863 May-18 A- <18 Years - - - - B- 18-21 Years 471 1149 89 1,709 C- 22-25 Years 3242 6864 1266 11,372 D- 26-28 Years 2661 6961 1164 10,786 E- 29-35 Years 2084 11743 2132 15,959 F - >35 Years 1339 11963 3208 16,510 Total 9,797 38,680 7,859 56,336 Jun-18 <18 Years - - - - 18-21 Years 348 1115 44 1,507- 22-25 Years 2540 4858 858 8,256 26-28 Years 1937 5059 818 7,814 29-35 Years 1486 9000 1618 12,104 >35 Years 884 9263 2369 12,516 Total 7195 29295 5707 42197 <18 Years - - - - 18-21 Years 426 1175 79 1680 Jul-18 22-25 Years 2784 3861 1035 7680 26-28 Years 2058 3281 874 6213 29-35 Years 1715 6548 1274 9537 >35 Years 851 10509 1736 13096 Total 7834 25374 4998 38206 Notes: 1. NPS was launched on 01 Jan'04 and was aimed at individuals newly employed with central and state government, but excluding ones in the armed forces.

2. NPS currently manages corpus of 59.20 lakh people in State and Central Government. 3. Only Tier I Active NPS accounts are considered for the analysis. 4. Central and State Autonomous Bodies are shown under Central & State Govt. respectively.

5. Sector wise number of Permanent Retirement Account Numbers (PRANs) generated during respective months (irrespective of current status /association) are considered for the analysis.

6. “Non-Govt” refers to “Corporate sector employees”

7. The age of Subscriber is calculated based on end date of the month in which his/her PRAN has been generated. 8. The data represented during different months are the number of PRAN generation during the months. 9. Includes NSDL & KCRA data.

10. Non-Govt PRAN data may not necessarily represent new employment as there may be some persons who were in employment earlier but have opened PRAN now.

Section 4: Circulars/Advisory/Notifications/Guidelines etc. Section:

Under NPS architecture, CRA acts as an operational interface for all intermediaries. The role includes liasoning with all necessary external agencies and recordkeeping, administration and customer service functions for all subscribers of the NPS. several developments have been carried out by these CRAs to strength the IT infrastructure and ease of operations for NPS subscribers

A circular for New/Up gradation of functionalities by Central Recordkeeping Agencies (CRAs) for April to June quarter ended on 30.06.2018 A. NSDL e-Governance Infrastructure Limited

Sr. Name of Description No. Development / Functionality 1 NPS Regular - The Retirement Adviser (RA) is appointed by PFRDA to engage in the Retirement activity of providing advice on NPS thereby to extend the reach of NPS. The Adviser online platform has been developed and released in the CRA system to facilitate registration of an individual/entity as RA. The RAs have been given the User ID and password for logging in to the CRA system and view the registration details.

The facility of Aadhaar based PRAN generation is also provided to RA’s. RA is required to login in the CRA system (www.cra-nsdl.com) using its login credentials and click on ‘Subscriber Registration’ for generating PRAN under NPS. The User is redirected to eNPS portal for Aadhaar based Subscriber Registration wherein earlier RA User was required to manually enter RA code in eNPS screen. Now, the RA code will be pre-populated (cannot be edited) on the eNPS screen for Aadhaar based PRAN generation. 2 NPS Regular - At present, option of Aadhaar seeding has been provided in Subscriber’s Aadhaar login wherein Subscriber can log in CRA system (www.cra-nsdl.com) with Seeding and User ID & password and seed Aadhaar in his/her PRAN account. Also, for PAN Update updating PAN and/or Aadhaar, Subscriber can submit physical request (S2 Form) to associated Nodal Office. Nodal Office, on receipt of S2 Form updates Subscriber’s PAN and/or Aadhaar in the CRA system.

Now, a functionality is released in the CRA system, wherein Nodal Office can update PAN and/or Aadhaar of Subscribers through file upload (.xml based) by logging CRA system (www.cra-nsdl.com).

Sr. Name of Description No. Development / Functionality 3 Mobile App- NPS Trust had initiated due diligence process under the alternative FATCA Self procedure of FATCA and sought Self-Certification from the Subscriber (for Certification Accounts opened on or after July 1, 2014). To facilitate the same, multiple options have been provided to Subscribers to submit FATCA declaration viz. online submission directly in the CRA system or submission of physical FATCA declaration to associated Nodal Office/CRA. An option to check FATCA compliance status has also been provided in limited access view at www.npscra.nsdl.co.in.

Now, an additional option to submit FATCA declaration through NPS mobile app has been released for Subscribers. Subscriber can login in NPS mobile app using login credentials and select "FATCA/CRS Certification" option. The Subscriber is required to fill-up the requisite FATCA details and submit the same through duly authorisation by generating OTP on his/her registered mobile number. 4 NPS Regular - At present, various functionalities are available to Subscribers in their CRA Subscriber system login such as Aadhaar Seeding, Update contact detail, etc. Now, for details below mentioned functionalities, submission/modification will be allowed modification 24 X 7 i.e. irrespective of EOD/BOD. 1. FATCA Self Certification 2. Aadhaar Seeding 3. Aadhaar based address update

5 NPS Regular - NPS Trust had initiated due diligence process under the alternative FATCA Self procedure of FATCA and sought Self-Certification from the Subscriber (for Certification Accounts opened on or after July 1, 2014). To facilitate the same, multiple options have been provided to Subscribers to submit FATCA declaration viz. submission of physical FATCA declaration either to CRA or to the associated Nodal Office, submission of online declaration directly in the CRA system, submission of FATCA declaration through mobile app. Accordingly, facility has been made available to the Nodal Offices to update FATCA status of underlying Subscribers online or through file upload in the CRA system.

Now, an additional option to submit FATCA Self Certification through limited access view (without login in CRA system) has been released wherein the Subscriber will select the relevant link on CRA Website (www.npscra.nsdl.co.in) and submit FATCA Self Certification through OTP authentication.

Sr. Name of Description No. Development / Functionality 6 All Sector - As per the stipulated process, on successful upload of Subscriber Contribution Contribution File (SCF) in the CRA system, Nodal Offices are required to Processing transfer funds to Trustee Bank. The funds are required to be transferred before auto cancellation of SCF in the CRA system. Funds if transferred after cancellation of SCF results in increase in instances of funds return by Trustee Bank.

Now, to reduce instances of funds being transferred by Nodal Offices after cancellation of SCF, auto cancellation date will be displayed in ‘SCF File Status View’ as well as in details being displayed on selecting ‘batch ID’ option.

7 NPS Regular- NPS Regular Subscribers have option in their CRA login to view/download Transaction Statement of Voluntary Contribution under NPS. The same can be used as Statement investment proof under the applicable section(s) of the Income-Tax Act, 1961. Now, in 'Statement of Voluntary Contribution’ Fund Acceptance date i.e. date on which funds were accepted by POP and Fund Clearance date i.e. date on which funds were received by Trustee Bank will be displayed alongwith amount of voluntary contribution.

8 NPS Regular - The Retirement Adviser (RA) is appointed by PFRDA to engage in the Retirement activity of providing advice on NPS thereby to extend the reach of NPS. The Adviser facility of Aadhaar based PRAN generation is provided to RA’s where RA User is required to login in the CRA system (www.cra-nsdl.com) using its login credentials and click on ‘Subscriber Registration’ for generating PRAN under NPS.

Now, the functionality is released in eNPS wherein ‘Payment TAB’ is disabled for RA while carrying out Aadhaar based Subscriber Registration. RA will capture complete registration details (except contribution payment) and on capturing of details, an Acknowledgement ID will be generated and displayed to the RA. Subsequently, Subscriber will use this Acknowledgement ID to make payment under NPS and on successful payment PRAN will be generated. An email/SMS alert is sent to Subscriber for PRAN generation.

9 NPS Regular- Under NPS, Subscribers/Nodal Offices have an option to raise grievances in Grievance Central Grievance Management System (CGMS) of CRA. On registration of grievances, a unique Token Number is generated in CGMS. Now, functionality has been released in the CRA system wherein complete history of respective grievance token number is displayed to the User such as grievance raised, resolution, escalations (if any) etc.

Sr. Name of Description No. Development / Functionality 10 NPS Regular- The changes have been implemented for Subscriber Registration under NPS. Subscriber For Resident Individuals (RI Subscribers), Bank details and Mobile number Registartion has been made mandatory for registration under NPS. Whereas for registration of Non-Resident Individuals (NRI Subscribers), changes viz. optional MICR code, additional occupation codes, only Passport allowed to be accepted as Proof Of Identity, discontinuation of Tier II account have been implemented.

11 NPS Regular- At present, option of Aadhaar seeding has been provided in Subscriber’s Aadhaar login wherein Subscriber can log in CRA system (www.cra-nsdl.com) with Seeding User ID & password and seed Aadhaar in his/her PRAN account. Now, an additional option of Aadhaar Seeding through limited access view has been released wherein the Subscriber will select the relevant link on CRA Website (www.npscra.nsdl.co.in) and seed Aadhaar in his/her PRAN account. This will facilitate Subscriber to seed Aadhaar under NPS even if login credentials are not available.

12 NPS Regular- UIDAI has issued guidelines on implementation of Virtual ID, UID Token Implementation and Limited KYC. As per UIDAI guidelines, Subscribers will have an option of Virtual ID to provide a 16 digit dynamic VID as an alternative of 12 digit Aadhaar, to the requesting entity/Authority for availing KYC /authentication services. Further, if local Authentication User Agencies (AUAs) carry out authentication through OTP, then only VID will be allowed as input. Aadhaar will not be allowed to be taken from user by local AUAs for authentication purpose. Also, local KUAs will not be allowed to store Aadhaar in their systems. Accordingly, VID has been implemented (in lieu of Aadhaar) under NPS for various processes such as eNPS- Aadhaar based registration, Aadhaar seeding, Address based Aadhaar update etc. Also, Aadhaar has been disabled/masked for various processes like Subscriber registration, Subscriber details modification, withdrawal, RA Registration, Subscriber detail view etc. 13 NPS Regular- As per stipulated guidelines, POPs are allowed to collect charges from the POP - Subscribers for the various services provided by them. These charges are Persistencey collect by POPs upfront from the Subscribers. Charges Now, additionally, persistency charges will be paid to POPs from the Financial Year 2017-18. A new service charge of Rs. 50 per financial year will be paid to POPs for each Subscriber whose account has been opened by them (associated with the POP for more than 6 months) and who contributes a minimum of Rs. 1,000 in Tier I account during the Financial Year. These persistency charges will be paid through cancellation of Units from Subscribers account.

B. Karvy Computershare Pvt. Ltd

Sr. Name of Dev/ Description No Functionalities . 1 Transaction Enhancement in Transaction Statement to display the Contact details and Statement PRAN details to make it more user friendly. 2 Demo for online A demo for Subscriber Registration and Contribution through eNPS portal Subscriber for Corporate website of Karvy CRA Registration & Contribution 3 GUI - online A note has been added in eNPS that "Debit Card options available only up to Subscriber Rs. 2000/- in SBI e-Pay Payment Gateway" Registration 4 API for PRAN An API has been implemented for providing the status of available Tier II verification units for POP for underlying PRANs. This is required so that POP can accept the Tier II withdrawal from subscriber in their websites. 5 API for PRAN In existing API for online PRAN verification, NRI flag has been added as verification output parameter. 6 Scheme Re-allocation of Incremental subscriptions of Government employees to Preference Pension Funds for FY 2018-19 7 Email Alert In case of Corporates, when the application for registering the Corporate is received by the CRA, an alert is being sent to Corporate confirming that the form has been received and the same is under process. 8 Subscriber Subscriber details modification facility has been extended at DDO level for Maintenance maker entry whereas the checker will be done by higher office. 9 Exit & A modification has been done in partial withdrawal screen available to Nodal Withdrawal office, to display DOJ and DOR in read only mode for reference purpose. 10 Contribution File As a part of contribution upload process, when the contribution file has been Status uploaded by the Nodal Office, a Contribution Submission Form (in PDF format) is made available for download to the Nodal office. Now the feature has been enhanced where users can download the entire SCF file in the same format which is uploaded by the Nodal Office user (PRAN wise). The same will be available for all the SCFs uploaded by the Nodal office. 11 Transaction A Subscriber can download the Statement of Transaction for a particular Statement period, on the screen. Now, a new feature has been enabled if the Subscriber wishes to get that particular statement on the registered email ID as and when required in addition to the download. 12 Subscriber A module has been developed wherein Retirement Adviser (RA) can access Registration and do the registration on behalf of subscriber using eNPS. In this process, through eNPS subscriber registration will be done by RA and contribution can be made by module for subscribers immediately or later through eNPS or POP. Retirement Adviser 13 Mobile App - An additional option to view historical NAV has been made available in NAV detail view Mobile App. Subscriber can login using login credential/PIN/Pattern and view the NAV details in graphical manner as well as actual details. 14 Subscriber Subscriber has now allowed to opt the investment in Equity upto 75% Registration maximum (subject to the age of the subscriber). Accordingly, the through physical changes/validations have been implemented in Subscriber registration form facility wherein the Equity allocation can be accepted upto 75%.

Sr. Name of Dev/ Description No Functionalities . 15 Subscriber Subscriber has now allowed to opt the investment in Equity upto 75% Registration maximum (subject to the age of the subscriber) while registration through through eNPS eNPS. Accordingly, the changes/validations have been implemented in (Equity upto online subscriber registration facility wherein the Equity allocation can be 75%) accepted upto 75%. 16 Scheme Existing Subscriber has now allowed to opt the investment in Equity upto Preference 75% maximum (subject to the age of the subscriber) during scheme Change through preference change. Accordingly, the changes/validations have been CRA/eNPS implemented in Scheme Preference Change facility wherein the Equity (Equity upto allocation can be accepted upto 75%. 75%) 17 Inter sector Existing Subscriber has now allowed to opt the investment in Equity upto shifting - Impact 75% maximum (subject to the age of the subscriber) during inter sector of scheme change shifting process. Accordingly, the changes/validations have been (Equity upto implemented in inter sector shifting facility wherein the Equity allocation can 75%) be accepted upto 75%. 18 Scheme Subscriber has now allowed to opt the investment in Equity upto 75% Preference maximum (subject to the age of the subscriber). Accordingly, the Change through changes/validations have been implemented in Mobile App facility wherein Mobile App the Equity allocation can be accepted upto 75%. (Equity upto 75%) 19 Upload of Bank details while subscriber registration has been made mandatory from scanned copy of April 1, 2018. Now the upload of scanned copy of proof of bank account proof of bank needs to be uploaded while registration through online mode by subscribers. account in online Subscriber Registration 20 Change of UIDAI has now advised the entities to stop accepting Aadhaar from the Users Virtual ID in and in place of that you should have a Virtual ID generated from UIDAI. The place of Aadhaar VID is a temporary, revocable 16-digit random number mapped with the in online Aadhaar number. The VID will allow you to authenticate transactions and Subscriber avail e-KYC services instead of providing Aadhaar number. Accordingly, Registration now Aadhaar has been stopped for subscriber registration in online process and VID is being used instead of Aadhaar.

Section 5: Press Release Section

Press Release # 1.

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY

EXPRESSION OF INTEREST (EOI ) FOR ACTUARIAL VALUATION OF ATAL PENSION YOJANA

The Honorable Prime Minister of the country had launched Atal Pension Yojana in May, 2015 for all Indian citizens in the age group from 18-40 years, specially targeting under-privileged sections of society in the unorganized sector. As on date 1.08 cr subscribers have been registered under Atal Pension Yojana( APY ) and more than Rs 4,500 Cr contribution have been collected from the subscribers under the Scheme.

PFRDA invites Expression of Interest (EOI) from reputed Actuary/Actuarial Firm for valuation to estimate the likely shortfall or otherwise on account of the minimum guaranteed pension and suitable provisioning for gap funding under Atal Pension Yojana(APY).

APY offers guaranteed pension benefits which entails suitable gap funding to fulfill the commitment of guaranteed pension benefits to the subscribers and spouse of the subscribers. The Expression of Interest document has been issued on 18.07.2018 and the same is available on PFRDA's website. Along with the other conditions, the actuarial firm should have carried out the actuarial valuation of at least 10 funds in the immediately preceding 5 financial years and out of which at least 2 of the funds should have had the minimum fund size of 5000 cr.

Section 6: International Section

Extract from OECD (2018) paper “Financial Markets, Insurance and Private Pensions: Digitalisation and Finance”

Using technology to enhance interactions with pension members

Financial Technology or Fintech is being deployed across a range of financial services to enhance interactions with consumers. Fintech can help to increase trust in financial products, by making them more accessible, transparent and comprehensible. It can improve data collection and analysis, aiding product design and personalisation. It can encourage participation in financial decisions through gamification and education. These developments are likely to be especially valuable in interactions with millennials, who expect to use technology to access financial services and who are now entering the workforce. Fintech can help to generate member engagement through the use of digital technologies in communications, including periodic reporting, marketing communications and other information. Digital communications can involve simply the storage and delivery of documents electronically, or it can involve “smart” communications, which use of other media, gamification, personalisation, or interactivity to attract readers. The trend away from paper documentation and towards electronic communications is being recognised by regulators, who increasingly permit financial service providers to use electronic communications as the default option for regulatory disclosure. For example, the SEC allows mutual funds to post their prospectus on line, and ASIC (Australia) has a “publish and notify” regime. Overall, digital technologies are likely to enhance the quality and effectiveness of interactions between pension providers and their members. Smart communications can take advantage of behavioural insights; for example, by using push notifications to nudge people into checking their balances or increasing contributions. The UK Competition and Market Authority’s inquiry on personal current accounts found that “annual interest statements have virtually no effect on consumer actions, but given immediately actionable information – text alerts and internet banking – overdraft charges can be reduced by consumers by almost 25%.” Digital technologies could also encourage greater transparency and allow people to manage their own data more efficiently, ultimately increasing their bargaining power and lowering the cost of private pensions (especially personal pensions). E-aggregators facilitate comparison sites or allow people to aggregate and analyse their own data. Ultimately, individuals might be able to manage all their finances from a single platform. A number of countries have created “pensions dashboards” to give members and beneficiaries an easy-to-use overview of their likely pension finances. These dashboards vary in terms of the depth of the data they contain and the functionality they offer, but research indicates that they can be a powerful tool for transmitting information, encouraging people to take action, and in particular for keeping track of multiple pension pots as individuals move between several different employers. As for digital disclosure, it is important to ensure that such platforms do not lead to less engagement or encourage members to skip important information. For example, plans to launch an auto- consolidation of small DC pots on Australia’s pensions dashboard were postponed because inactive accounts in some cases offered better protection than active accounts; users of pension dashboards should be given all the relevant information as well as a simple “one click” option to take action.

Impact of technology on internal processes

Fintech can also help to facilitate pension scheme administration and risk management, particularly for smaller plan sponsors who may have fewer resources and could benefit the most from lower costs and improved efficiency. For example, Fintech has been used to create platforms to facilitate the management of pension schemes for employers by providing a digital auto-enrolment platform. These are especially useful for small employers who may not have the resources or expertise to select a scheme or connect it with their payroll systems.

Fintech can also facilitate risk management for pension providers. Improved risk estimates and forecasting could be particularly powerful in avoiding large downward swings in DC pots, for example. New analytical techniques and big data could lead to the creation of more efficient and more personalised retirement solutions, in particular for the pay-out phase. Financial data and analytics improve our understanding of consumers and their savings and spending habits, therefore solutions for financing retirement could be better tailored to individuals’ specific circumstances.

Lowering investment costs is recognised as an important contributor to increased portfolio returns. Fintech is helping to reduce the cost of portfolio management, through low-cost investment products such as bespoke tracker funds and automatic portfolio rebalancing and algorithmic trading. Several robo-advice firms are positioning themselves as business-to-business operations, offering automated portfolio management services to businesses providing pensions for their employees. Direct trading between players on the buy side, especially in the corporate bond market, are helping to offset the decline in market making as investment banks withdraw liquidity, but in doing so they transfer trading risks to investors and make markets less transparent, so may need additional supervision. Fintech is also enabling the emergence of entirely new asset classes, such as peer-to-peer lending.

Technological applications can support risk management and compliance through making Management Information Systems, compliance monitoring and risk training more efficient and transparent. Technology can support labour-intensive regulatory and compliance processes such as real-time transaction analysis, online registration, risk weighted asset calculations, data analytics and aggregation; modelling, scenario analysis and forecasting; monitoring internal culture and behaviour and complying with customer protection processes. Data-mining algorithms can organise and analyse large sets of data, including qualitative data such as e-mails and recordings.

The impact of technology on business models

Technology is changing business models in financial organisations in two main ways. Within internal operations, it is leading to disintermediation between front, middle and back offices. Within commercial operations, it is changing consumer behaviour and so forcing adaptation by providers. These trends are already evident in other financial institutions but they are likely to affect pension providers in the future.

Incumbent pension providers may be at a disadvantage to newer players in exploiting new technologies, because they are constrained by existing IT infrastructure that is expensive to change or replace. This could enable new entrants with lower costs to enter some areas of pension provision, as 37

has already been seen in the area of advice. As an example of the potential costs of upgrading legacy systems, UBS is reported to have invested USD 1 billion in redesigning processes across its wealth management operations to introduce robo-advice in the UK.

Fintech is bringing increased transparency and a greater use of comparison sites. This trend could lead to pressure on pension providers to provide more granular reporting on their cost structures and the fees they charge, ultimately leading to a drop in pricing.

Risks associated with the greater use of technology

Each of the potential advantages of Fintech carries corresponding risks. Some of these risks are not new, although they may be more acute because of the applications of new technologies, for example data security and privacy risks. Fintech also has the potential to create new types of risk, such as structural changes in the financial services industry and the entry of non-regulated players.

In the area of interaction with members, there are a number of potential risks. Fintech could aggravate financial exclusion for those who do not engage with digital communications; conversely, there is some concern that consumers will place too much trust in technological solutions and so the fall-out from any problems with Fintech will be particularly damaging. One example of this is crowd funding, where small investors might take more risk than with traditional investment products.

Data privacy and security risks are heightened with the introduction of technologies that rely on the capture, storage and analysis of large quantities of data in order to provide improved services. Fintech providers that use cloud-based IT services may put data beyond the reach of regulators.

Technological advances may lead to a greater degree of advice from and outsourcing to specialised providers, for example enhanced analytics companies. These companies may fall outside the scope of pensions regulators, but a failure by them could have negative consequences for confidence in private pensions.

Section 7: Financial Literacy

Under the financial literacy section, it is intended to create awareness on early retirement planning to generate appropriate corpus for desired monthly pension. As indicated earlier also, amongst several activities, one of the activity is to share articles/blogs on pension sanchay website as financial literacy initiative. The below are the articles/blogs posted on Pension Sanchay website as subscriber education measures:

i) Questions to ask when one sits for Planning

Financial planning is the most important step you should take when you want to reach your financial goals. Without planning approaching financial goals is not only difficult but will take longer time for your goals to get fulfilled. Thus comes in to picture financial planning. Everyone cannot afford financial planner to figure out things for them. Also when you don’t have huge investments or savings worth crores its pointless to seek for expert opinion, because same can be done by you.

I always prefer this theory of asking myself questions and then try to find their answers. This theory will enable us to research on many things and we analyses many things in the process. This exercise not only helps us to develop research and analysis skills, but also save some of our hard earned money.

Following questions one should ask himself or herself whenever one sits for financial planning

1. What if the main earner of the family is no more?

Death is the fact of life and it can never be denied, it comes to someone after leading a health life that is after retirement but to someone it comes early. When the bread earning member dies early, not only he dies, but the hopes of family also dies when children education and all are still remaining, repayment of financial debts etc. To tackle this problem one must always have a life Insurance Cover. Though LIC cover with maturity benefits is famous but one may also opt for Term insurance as it provides larger coverage at lowest premium. It also comes with tax benefits.

2. How to secure family’s health?

Looking at the pollution, viral infections anyone can suffer from a disease. Especially women and children are more susceptible to such diseases. One may require to visit Doctor or even hospitalized. Hospitals may cost you an amount that is enough to eat up your savings. Thus taking a Mediclaim or health insurance is always better. It also comes with tax benefits.

3. What is necessary to ensure family’s financial security in future?

This is very important question one must address, as most of us ensure happiness and wellbeing of our family. To ensure financial security family one must invest in various options available so that returns will serve as your other income source. At month end you must separate an amount of your saving first and then use remainder for expenses. Saving is very important thing one should do.

4. How will I earn after retirement?

This question almost everyone faces who are working with someone as an employee. Though many employers provide for pension plans, but taking a separate pension plan will be a better idea. It will be less burdensome for you during retirement to meet major expenses.

Thus above are only few questions, but one can have a long list of questions to solve major problems to ensure life goes smoothly.

By Rahul J Soni, CA The author is a Chartered Accountant and a member of ICAI

ii) The Importance of Planning

Savings and taking care of personal finance is an age old concept in India. Before the era of Harappa civilization to Mughals to British Raj till today, it continued through generations. In olden days, when there were no sources for depositing money such as banks or other financial institutions, people used to deposit their saved money in lockers. Some used to dig hole near their place of residence and used to deposit money in a pot made of soil and cover up the whole. This money was then used by them in the times of need. It was a kind of secret deposit, which was known only to person who did that. Thus saving is a kind of habit which is in the Indian blood. Thanks to our ancestors.

At present, we have many options for investing and depositing our savings. Those are banks, financial institutions mutual funds, stocks etc. It is good exercise to invest, but do people calculate whether their total investment will pay them with enough returns. Returns which will support them to survive even after retirement, maintaining same standard of living? Answer to this question will be difficult for most of us.

Practically, Now-a-days it has become very difficult to save our earnings, thanks to our expenses and never ending needs, dining, internet expense, mobile expenses, travelling, movies etc. and the list continues. These expenses eat up our savings Thus we need a proper plan to manage our finances.

As the famous quote goes “Stitch in time saves nine”, like wise proper planning of finance at right time makes things smoother in long term. We need to plan our finance by taking in to account our future goals, our future expenses such as buying a new home, children education abroad, retirement plan etc.

As Warren Buffet says “If you buy things you don’t need, you will soon sell things you need” this quote thus our priority should always be doing things which are necessary.

When you sit for planning you should always ask yourself few questions and try to find of answers on the following three aspects.

Life: Necessary things you should do even if you have normal income is that, One should opt for life insurance scheme and coverage should be of proper amount as it is essential for financial security of people who are dependent on you. Life insurance is of various types, one can go with life insurance with maturity benefits. However, if you want to pay less premium, Term insurance a good option as it covers large amount at less premium. Term insurance does not comes with maturity benefits. Also you will get tax exemption on premium payment under Sec 80C of Income tax Act, if you opt for Life insurance plan. Thus giving you tax benefit as well

Health: Next important thing one should go for is Mediclaim plan, sudden hospitalization, Hospital bills may sometimes eat up all your savings, so Mediclaim plan is important. One should have proper cover and should opt for higher amount. You get tax benefit if you opt for health insurance plans under Sec 80D of Income Tax Act.

Retirement: What you will do when you retire? Your income stops when you retire and to maintain your current standard of living with reduced income or no income after retirement becomes difficult. To avert this, one should opt for Pension plans. It is also known as Annuity Plans. These type of plans are designed to offer regular income to people after retirement. Policyholder can choose the date from

which they can start receiving the pension. This date need not be after retirement and but can be much earlier also. You also get tax benefit when you opt for pension plan under Income Tax Act.

Hence, next time when you sit for planning always consider this necessary things first, so that life will be better and smoother.

By Rahul J Soni, CA The author is a Chartered Accountant and a member of ICAI

iii) Being too Risk averse can also be risky

It is said that Cricket is religion in India and the event called Indian Premier League (IPL) is one of the important festival. Being a cricket fan, I too watched a few of the IPL matches. Among them, I wish to quote one match wherein the team batting first lost all the wickets, somehow could put up average target but still managed to win the match and the peculiarity of the this match is team batting second had lost despite of having four wickets in hand. This remind me about the another match, where the team batting second had lost only 2 wickets but could not even get closer to the target. In short, in both the cases, team which had lost fewer wickets than the opponent lost the matches. On digging little bit more on my memories and observations about the game, I realised that one of the important reasons for losing in such cases is adopting a too defensive approach at certain stage of the game and that is what catches my attention as a student of finance. Fear of losing the wickets may results in losing the match.

One good lesson we may derive from the above mentioned observations is that too defensiveness may not bring you the desired results. And I genuinely feel that this holds good in every walk of the life, especially in achieving the desired financial goals. Every individual requires fund at various stages of life for different event and to accomplish the task, a certain amount of fund is required. A right and thoughtful financial planning can only ensure that you get right amount at right time for the desired event. However, many times it has been seen that while doing financial planning people adopt very defensive/conservative approach and end up with inadequate money when it is required. There are lot of instances when people could not achieve their financial goals just because they remain very conservative throughout the investment period. Fear of losing the money may result in missing the financial goal.

Now, the question is what one shall do to achieve the financial goal? An answer to this question is “Allocate (invest) your resources (assets/money) rightly”. Presently, there are many investment options available to the investor ranging from Real estate to Retirement fund, Commodities to Currency, Equity to Corporate Bonds/Post office/ Banks(FD), Money market instruments to Mutual funds, Gold to Government securities etc. It may be noted that each of the aforementioned investment vehicle/instruments or asset class has some peculiarity and are different from each other in terms of the investment horizon, risk associated with them and the returns it may fetch. However, for the purpose of understanding and simplicity, various financial instruments which can be a part of the investment basket are ranked on the basis of the risk associated with these instruments and are depicted below.

Derivatives Very high R risk Stocks/Equity E

MF High Risk T Bonds/Fixed income U Medium Risk Cash/Term Deposit R

The above diagram indicates that Equity and related instruments carries high risk as compared to fixed income instruments and FDs, however attention is sought towards the upward arrow given in the diagram indicating the returns. It is evident that an instrument having higher risk delivers the higher returns.

In the Indian context the equity (Benchmark Sensex) has given annualised returns of around 16% since inception (1979) till March, 2018. These returns are higher than the returns delivered by the fixed income instruments. Further, on the volatility front also last few years have witness the considerably higher volatility on the debt front which is perceived to be more stable. So rather than putting all the money in the instruments which are volatile (may be less but not nil) and may deliver low-medium return in long run, it is advisable to have some exposure to the instruments which may be volatile in short-run but has the potential of delivering higher returns. Therefore, equities or any other instrument which has potential of fetching good returns shall be given appropriate weightage while deciding the asset allocation (since risk is also function of age, please refer my previous article on Life Cycle Fund - http://www.pensionsanchay.org.in/blog/dont-shy-away-from-the-capital-market-life- cycle-funds-may-help-you ). It has been observed that people feel that a difference of two-four percent would not make any difference but there money should be safe. I am not saying that the safety of money should not be a prime motive but at the same time want to emphasise that returns are important to beat the inflation and difference of two or four percent does make a significant difference. The same is illustrated with the help following example.

Suppose Mr. X, Mr. Y and Mr. Z have invested Rs. 10,000/- every year for the period of 20 years in different investment instruments which could fetch 6% , 8% and 10% returns respectively for them. Their corpus at the end of the 20 years is depicted below:-

Corpus at the end of 20yrs at different interest rate

₹6,30,024.99 ₹4,94,229.21 ₹3,89,927.27 10% 8% 6%

Mr. X Mr. Y Mr. Z

From above graph, it is evident that the difference in the fund value for an investment of Rs. 10000 per year is ₹ 1,04,301.95 for Mr. X and Mr. Y; ₹ 1,35,795.78 for Mr. Y and Mr. Z and ₹ 2,40,097.73 for Mr. X and Mr. Z, this indicates that this difference is significant and would be more significant if the gap between interest rate would increase keeping other factors constant. This proves returns does matter significantly.

Therefore, such instruments are like micro nutrient to the food which may not be required in bulk but should not be ignored as its very critical for the creation of the essential corpus. Depending heavily on the traditional instruments may not be good idea. Thus, it is imperative to clearly define the financial goal, understand the risk aspect and then accordingly decide upon the right asset allocation rather than simply keep on investing in the conventional conservative investment instruments which may not be appropriate in meeting the financial goal. Remember, playing too safe may also be risky.

By Dr. Ashish Dongare

Manager, PFRDA

Section 8: Macro-Economic Statistics

As on As on 29th As on 31st March, June, July, 2018/Last 2018/Last 2018/Last Absolute Monthly business business business Change Percentage Indicators Units day day day (Monthly) Change 37606.58 2,183.10 6.16 32968.68 35,423.48 S&P BSE Sensex - 11356.5 642.20 5.99 10113.70 10714.3 CNX Nifty - 68.61 0.03 0.05 65.04 68.58 Rs/$ - Rs/ 10 29,710 -722.00 -2.37% 30,408 30,432 Gold gm 74.25 -5.19 -6.53 70.27 79.44

Brent Crude $/barrel 119.7 0.50 5.77 Wholesale Price Index ON 116.0 119.2

BASE 2011-12=100 - (Y-o-Y) 139.8 2.70 4.17 Consumer Price Index ON 136.5 137.1 BASE 2012=100 - (Y-o-Y) 7.75 -0.23 -2.88 7.42 7.98 10 year G-Sec Yield % p.a 405.14 -0.91 -0.22 USD in 424.36 406.05

Foreign Exchange Reserve bn 2264 7,095 -146.86 Net FPI/FII(Equity) (Rs. Rs. 11654 -4831

crores) Crores 43 11,013 -100.39 Rs. -9044 -10970 Net FPI/FII (Debt) Crores Rs. -43 -42 1 -2.33 FPI/FII (Hybrid) Crores 52

2264 18,059.00 -114.33 Rs. 2662 -15801 Net FII (Total) Crores Source: BSE, NSE, RBI, CSO, SEBI, PIB, goldpriceindia.com, Bloomberg, fpi.nsdl.co.in.

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