The Pension Fund Regulatory and Development Authority (PFRDA) is planning to allow pension funds under the National Pension System (NPS) to invest directly in large infrastructure projects through alternative investment funds (AIFs) within the next two years, chairman S Ramann said on Thursday.
Speaking to reporters on the sidelines of the NPS Diwas celebrations on October 1, Ramann said the regulator could allow such investments with a long-term horizon.
“We can take exposure directly in large infrastructure projects in two years. We can do that for 10-15 years and there will be no problem as it will be patient capital,” he said.
PFRDA plans to expand investment options under the NPS to allow subscribers to allocate a portion of their retirement savings to long-term infrastructure assets. “Once this is implemented, subscribers will also be able to allocate funds to large infrastructure projects for 10-15 years, which aligns with the long-term nature of retirement savings,” Ramann said.
Currently, PFRDA allows pension funds to invest in real estate investment trusts (REITs) and infrastructure investment trusts (InvITs). The proposed AIF route could provide subscribers with additional investment avenues and greater diversification.
PFRDA has also set a target of adding 2-3 crore new NPS subscribers over the next two years. To facilitate this, it has eased the onboarding process and introduced schemes such as NPS Tatkal, which allows subscribers to be onboarded through UPI.
“We are actually looking at about 2-3 crore subscribers coming in the next two years. NPS Tatkal will give us the ability to spread the reach of NPS,” Ramann said.
Currently, five banks — State Bank of India, HDFC Bank, ICICI Bank, Axis Bank and IDFC FIRST Bank — have joined the initiative to facilitate NPS Tatkal.
