Pension Fund Regulatory and Development Authority (PFRDA) Chairperson Sivasubramanian Ramann says that the states are free to offer the Old Pension Scheme (OPS) but they should not stop contribution under the National Pension Scheme (NPS). According to the data, OPS is unsustainable for any state government.
“I cannot announce OPS and expect that there is no cost on me,” he told The Indian Express in an interview. Chhattisgarh, after restarting the OPS, has returned to the NPS. Punjab, which had announced a reversal to the OPS, continues to contribute to the NPS, Ramann said. Previously, he has served as the Executive Director at the Securities and Exchange Board of India, and as Chairman and Managing Director of the Small Industries Development Bank of India. Edited excerpts:
What is the current subscriber base and assets under management (AUM) of NPS and the Atal Pension Yojana (APY)? Where do you expect the AUM to grow by the end of March 31, 2025?
As of February 1, 2026, pension funds’ total AUM stood at around Rs 17 lakh crore, registering a year-on-year growth of 20%. The APY’s contribution is small at around Rs 1,300 crore. When it comes to the number of subscribers, the trend is reversed. Out of close to 9 crore active subscribers, seven crore belong to APY and two crore to NPS. It is difficult to give AUM guidance. The number I actually want to put in front of me is the subscriber number, because we want every Indian to have a pension account. It is an absurdly large target, but if we put that target in front of us, we would reach it. For this, we have split the organisation into multiple distribution channels — agriculture, MSME and self-help groups (SHG). Then, we have platform workers, another large area. And of course, the traditional corporate pension.
What are the reforms being considered to make NPS more attractive — in terms of tax treatment, liquidity, or product flexibility — especially for young private-sector employees?
We have very good product flexibility. I would like to see the reforms that we have carried out to play for a period of time before trying to make any more tweaks. We are, therefore, experimenting with newer types of products. We have made changes in the Vatsalya product. We are trying to introduce the NPS Swasthya Pension Scheme as a proof of concept. There is a full-fledged committee that is working on the income yields coming from the pension corpus. We need to provide competition for annuities, as we have received feedback that people are unhappy with them due to a lack of transparency and pricing concerns. We want to create a pension payout product that is completely transparent.
There have been increasing demands from some states to revert to the OPS. How does PFRDA assess the long-term fiscal sustainability risks of OPS compared to NPS?
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The numbers are very clear — OPS is unsustainable for any (state) government. There is no concept of a free lunch. I cannot announce OPS and expect that there is no cost on me. There is an annual cost. What we are trying to convey to the state governments is that you have a contribution to the NPS, which has been ongoing for 15 years, and suddenly you decide that you want to opt for OPS. They are fully within their rights to announce the OPS. My only point is, don’t stop contributing under the NPS. It is a funded account and every pension is a funded account. The OPS is also funded from the budget. If you want to offer the OPS, please do. But let the NPS remain as the funded account. If you want to put more money on top of that from the budget, you are free to do so. But the concept of a funded pension account is absolutely essential … we cannot run away from that.
Are the states listening to you?
The process is on. We have written letters very clearly stating the logic. They may like to continue to pay into NPS, but also offer OPS as a scheme.
Have the states that restarted OPS, stopped NPS?
Chhattisgarh has come back (to the NPS). Punjab is still contributing to NPS even though it is showing interest towards OPS.
The Economic Survey 2025-26 highlighted expanding interoperability across NPS, APY and other schemes for seamless portability. What are your thoughts on it, and is there any work underway?
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In the APY and NPS, there is no concept of interoperability. It’s about allowing people to easily have both accounts. If you are in APY, you are in it for a long period of time. I would not recommend people to close their APY account, as there is an assured income guaranteed by the government.
Portability between Employees’ Provident Fund (EPF) and NPS is something that has been talked about since 2016, but has not happened. The law says that you don’t have to force a person into EPF; it is out of practice that people are investing money in it. The EPF is a great product because it has given very good tax-free returns. I am saying competition is the only thing we should be interested in. Let competition decide whether someone wants EPF or NPS. Let there be products. Not everybody wants to have a high equity product.
Could you provide this year’s (FY26) pension fund investments in debt and equity, compared to last year?
As of February 1, 2026, total investments reached Rs 11.36 lakh crore, a 17% increase from March 31, 2025, and a 21% year-on-year growth.
How many states have adopted the Unified Pension Scheme?
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Eight states, including Maharashtra and Odisha, have introduced the UPS.
PFRDA has partnered with Farmer-Producer Organisations (FPOs) and MSMEs to improve pension coverage for workers in these sectors. How has the progress been?
PFRDA has undertaken various initiatives to expand pension coverage among FPOs, MSMEs, and platform workers. In September 2025, the regulator enabled the Ministry of Corporate Affairs-registered FPOs to act as pension agents, allowing them to facilitate enrolments under the NPS. Last year, we introduced an incentive of up to Rs 100 per subscriber for Points of Presence enrolling new NPS subscribers through FPOs. These measures are aimed at strengthening last-mile outreach in rural areas and leveraging the existing networks of FPOs to improve pension penetration among farmers and allied workers.
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