Contribution to NPS slows down in Q1

MUMBAI: In the backdrop of widespread job losses and economic distress, the number of private sector companies contributing to the National Pension System (NPS) grew at a slower pace in the June quarter than a year before, even as withdrawals rose.

According to HDFC Pension Management Co., one of the largest fund managers of NPS by assets under management, the number of firms contributing to NPS rose 8.24% to 497,000 during the quarter, against a 11.86% growth seen a year ago. “Outflows in NPS is around 2.5% of inflows. Customers are withdrawing for medical reasons, children’s education, etc., and we do not see any other trend,” said Sumit Shukla, CEO of HDFC Pension Management Co.

“The overall inflow in Apriljuly has been satisfactory, but withdrawals, too, have happened, which, in absolute terms, is low; but it is higher than last year,” said S. Bandyopadhyay, chairman of Pension Fund Regulatory Authority of India, which regulates NPS.

According to the Centre for Monitoring Indian Economy, India’s urban unemployment rate stood at 9.15% in July, against 12.02%, 25.79% and 24.95%, respectively in the previous three months.