PFRDA chief says India retirement income rate 35-40% versus global 60%

Pension Fund Regulatory and Development Authority (PFRDA) Chairman S. Ramann said India's retirement-income replacement rate is around 35-40%, well below the global benchmark of about 60%. Speaking in Chennai on Friday, Ramann said the gap means Indians need to save more during their working years to maintain their standard of living after retirement. PFRDA is targeting 30 crore subscribers through NPS and APY over the next four to five years, with a focus on non-government workers including gig workers, farmers and MSMEs.

Ramann said PFRDA cannot prescribe a fixed savings target because the required corpus depends on income, lifestyle and priorities. Instead, the regulator will provide illustrations of how regular contributions could grow. He said some NPS subscribers contribute Rs 200 a month while others invest Rs 2 lakh a month. PFRDA is developing digital platforms including StAR NPS with BSE and NPS Tatkal with NPCI and BHIM to make onboarding easier and reduce customer acquisition costs.

On the Unified Pension Scheme, Ramann said its cost to the government would be about Rs 170-180 for every Rs 100 under NPS, compared to Rs 450 under the Old Pension Scheme, which he called unsustainable. He said 10-12 state governments have announced UPS. PFRDA is also working to improve pension fund returns through diversification into alternative assets, aiming for double-digit returns with low volatility.