PFRDA Turns to Mutual Fund Distributors to Widen NPS Reach at Bengaluru Outreach

Bengaluru, October 24, 2026: The Pension Fund Regulatory and Development Authority (PFRDA) is turning to Mutual Fund Distributors (MFDs) to take the National Pension System (NPS) to more households. Chairperson Shri S. Ramann said reach and distribution remain the key challenge for the scheme. He was speaking at a StAR NPS outreach programme for MFDs at The Chancery Pavilion in Bengaluru today, attended by distributors, industry representatives and partners from the pension sector.

After a welcome address by Mr. Arpit Singh, PFRDA the programme began with a presentation on NPS by Shri K. Mohan Gandhi, Chief General Manager, PFRDA. Shri S. Ramann then addressed the gathering. The sessions that followed turned to the practical side of distribution. HDFC Pension Fund made a presentation on the role of a Pension Distributor, and Mr. Mandar Jehurkar of BSE explained how distributors can onboard subscribers through StAR NPS. Certificates were then presented to MFDs onboarded as Pension Distributors. The programme closed with an open house and question and answer session and closing remarks by Mr. Shailendra Babu, PFRDA

Shri S. Ramann said, “NPS was designed by the Government of India for every citizen of the country. If we have 60 crore people with a savings bank account, we must also have 60 crore people with an NPS account. The challenge for NPS is reach and distribution. It is the lowest cost product available, at about 0.2% a year on AUM, far lower than any mutual fund, and that has made it harder for distributors to market. So we have built digital rails that sharply bring down the cost of acquiring a customer. With StAR NPS, a distributor can register on the platform, choose a Point of Presence and start servicing clients right away, while earning on the AUM of the accounts they bring in.”

He added, “The longer your money stays invested in NPS, the better your returns, because of the power of compounding. Over the last 12 months we have made the scheme far more flexible. Subscribers can stay invested up to the age of 85 and can exit after a minimum vesting period of 15 years, so the age of 60 is no longer fixed. What some people call a lock-in is the very reason the money grows.”

Under the revised exit rules, subscribers with a corpus of up to ₹8 lakh can withdraw the full amount as a lump sum at normal exit. Non-government subscribers with a corpus above ₹12 lakh can take up to 80% as a lump sum and must use at least 20% to buy an annuity. Shri Ramann said pension funds can now offer schemes with up to 100% equity for younger subscribers. He added that employer contributions of up to 14% of an employee’s basic pay and dearness allowance to NPS qualify for a tax deduction under the new tax regime.

He also spoke about NPS Vatsalya, which allows parents to save for a child from a young age. He highlighted NPS Swasthya, launched on October 1, which pairs a pension account with a super top-up health insurance policy. In case of hospitalisation, the subscriber’s share of the bill is paid directly to the hospital from the account, and the insurance cover pays the rest.

StAR NPS, built by BSE Technologies Pvt. Ltd. (BTPL), lets distributors register subscribers entirely online. Subscriber details are verified through CKYC and DigiLocker, and contributions go straight to the Trustee Bank. A Permanent Retirement Account Number (PRAN) is generated instantly through integration with the Central Recordkeeping Agencies. Alongside StAR NPS, PFRDA has introduced Tatkal NPS. It allows customers to open an NPS account and contribute through UPI apps such as BHIM and PhonePe.

PFRDA will continue to hold outreach programmes with distributors and channel partners across the country to widen NPS coverage.

User :- Ravanan Raghav

Email :-ravanmkra@gmail.com