NPS Digital Revamp To Protect Subscribers' Interests?

NPS: NPS is getting a significant digital makeover that will "protect subscriber interest" via risk-based monitoring of invested funds and automating the NPS Trust's compliance procedure.

Since 2004, the NPS has covered newcomers to the central government, workers of the majority of state governments, central autonomous bodies, and certain state autonomous bodies, as well as all other people and corporates in India voluntarily. NPS has over 1.5 lakh users and has received Rs 4,41,875 crore in contributions.

According to the current system at NPS Trust, it gets periodic reports from various intermediaries on a monthly, quarterly, half-yearly, and yearly basis, which are sent through e-mail and even physical methods and are verified for compliance and validity. The Pension Fund Regulatory and Development Authority (PFRDA), which governs the pension industry, receives notice of the exclusions.

What Will Change In NPS 2.0?

The NPS Trust will develop a new digital solution to "effectively and efficiently measure and monitor compliance across the pension fund management ecosystem by providing an electronic platform for them to submit compliance reports," according to the NPS Trust.

This will allow NPS Trust to conduct thorough compliance checks regularly, "effectively and efficiently monitor intermediaries," and keep PFRDA informed.

More significantly, automating the compliance process would "build analytics and a risk-based monitoring system, as well as establish a strong risk data governance and issue reporting framework," according to the research.

The NPS Trust will use analytics and business intelligence.

The NPS Trust will employ an agency to build the digital platform, and the NPS 2.0 project will be operational in nine months after it is granted later this year. The different Pension Funds, custodians, and Trustee Banks are among the intermediaries mentioned above.

Why Is Monitoring Pension Funds Vital?

Pension Funds acquire securities in the name of the NPS Trust, and these Pension Funds handle all subscribers' pension payments and are responsible for investing NPS contributions according to PFRDA investment rules.