Newest knowledge launched by PFRDA on Thursday estimated that the expansion in general subscriber base, comprising govt, non-public sector and Atal Pension Yojana, slowed to 16.3% over the past monetary yr, with the whole quantity pegged at over 7.3 crore.Inside Nationwide Pension System (NPS), with below 36 lakh subscribers, the share of personal sector contributors, comprising the company scheme (the place the employer and worker contribute) and particular person pension accounts, was estimated at 7.5%.
When it comes to development, within the final monetary yr, for the company scheme the tempo moderated to 16.1%, the slowest since 2020-21 when Covid-19 took a toll on the economic system. The all-citizens mannequin (largely people) noticed a sharper moderatation in tempo of development to twenty.3% in FY24, in comparison with 29% in FY23 and over 30% in earlier 4.
Officers and consultants blamed it on the brand new tax regime, a suggestions shared by a number of corporations, which had been giving the company scheme to their workers. Underneath the brand new tax regime, which is the default choice, there’s a tax profit for employer’s share of contribution to NPS even within the case of personal sector employers, however the worker’s share is not going to get the profit.
PF and Staff Pension Scheme, which is a part of it, being default choice throughout corporations is seen as the opposite stumbling block for the pension system regulated by PFRDA, that’s seen to be a lot less expensive and has a observe file of providing items returns. “Each time an worker joins an organization, PF papers together with gratuity and different statutory compliances are given to her or him, with out even making them conscious of different choices,” an business supply mentioned.
What can be including to disinterest even amongst govt workers and personal sector is absence of tax profit on the extra contribution being made by the employer. When NPS began, the worker and the employer, which is the central and the state govts, had been contributing 10% every to the pension corpus. Subsequently, to sweeten the deal, the states and the central govt elevated their contribution to 14% of the worker’s wage. However the tax profit was not prolonged. At March-end 2024, property below administration below NPS, rose over 30% to 11.7 lakh crore, with govt workers accounting for over three-fourths share, whereas non-public sector’s share rose to 19.3%.
