PFRDA Plans Direct Pension Fund Investments In Large Infrastructure Projects Within Two Years

The Pension Fund Regulatory and Development Authority (PFRDA) plans to allow pension funds to invest directly in large infrastructure projects within the next two years, chairman S Ramann said.

The move is aimed at expanding investment options under the National Pension System (NPS) and directing part of the country’s long-term retirement savings towards infrastructure assets that require extended investment horizons.

PFRDA seeks wider investment avenues

Ramann said pension funds could potentially hold direct exposure to large infrastructure projects for 10-15 years, making them suitable for the long-term nature of retirement savings.

PFRDA has already widened the investment options available to pension funds. Investments in real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) are permitted, while alternative investment funds (AIFs) have also been introduced into the investment universe.

The regulator is simultaneously working to expand NPS participation beyond government employees and formal-sector workers. Informal workers, self-employed individuals, merchants and small business owners are among the groups being targeted.

PFRDA aims to add two-three crore NPS subscribers over the next two years, with digital onboarding expected to be an important part of the strategy.

Digital onboarding to drive NPS expansion

NPS Tatkal, being developed on the National Payments Corporation of India (NPCI) platform, will enable individuals to open pension accounts through Unified Payments Interface (UPI) providers and make contributions through UPI.

Five large banks have joined the initiative, while Common Service Centres will also facilitate onboarding. PFRDA plans to use the Jan Dhan network to widen coverage, with a long-term goal of linking every Jan Dhan account with an NPS account by 2047.

NPS currently has about 2.3 crore government and non-government subscribers and manages assets worth ₹19 lakh crore, Ramann said.

The regulator has also introduced NPS Sanchay as a default investment option for non-government subscribers who may not be comfortable making asset-allocation decisions. The option is designed to provide an allocation similar to that available to government employees while allowing subscribers to participate in equity-market growth.