In a positive development for individuals preparing for retirement, a forthcoming pension scheme is set to be introduced.
The upcoming scheme will feature a noteworthy aspect—investors will receive fixed returns on their investments.
Deepak Mohanty, the chairman of the Pension Fund Regulatory and Development Authority (PFRDA), shared this information on Wednesday.
He revealed that the PFRDA is diligently working on a pension scheme that guarantees minimum assured returns, with an official announcement expected in the near future.
Furthermore, Mohanty highlighted that the Atal Pension Yojana (APY) has attracted approximately 53 million subscribers.
The target for APY enrollments this year is 130 million, surpassing the 120 million enrollments achieved in 2022.
Maintaining a Balance Between Risk and Returns
During the discussion, Mohanty emphasized the importance of finding a balance between risk and returns.
He explained that assurance comes at a cost, as evident in the APY where the government provides the assurance while customers bear the associated expenses.
In the case of schemes offering assured returns, pension funds must allocate more capital due to the increased risk involved.
Mohanty stated, “We are exploring this possibility and have made progress. We aim to introduce a product that not only provides attractive returns but also mitigates risks.
” He also highlighted the progress being made by Regional Rural Banks in expanding the client base of APY.
Update on Pension System Review for Government Employees
When asked about the progress of the committee, led by the finance secretary, responsible for reviewing the pension system for government employees, Mohanty commented that it was too early to provide any specific details.
It’s worth noting that Mohanty himself is a member of this committee.
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