Pension Bulletin: September-October 2025
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The Pension Bulletin (Volume XIV, Issue IX) is a comprehensive monthly publication issued by the Department of Policy Research, Market Watch and Systemic Risk under the direction of the Pension Bulletin Editorial Committee at PFRDA. This edition covers critical insights into India's pension landscape, global pension sector trends, and important regulatory updates.
Key Highlights
1. Indian Economy Overview
Equity Market Performance
In September 2025, the NSE Nifty 50 index rose slightly to around 24,611 level mark from 24,426 level in August, recording a modest gain of 0.8 percent. The positive returns were largely due to optimistic domestic cues in the Indian economy. The GST Council announced a major reform simplifying the tax structure during the week ended September 5, which provided a boost to the equity markets.
Midcaps and small caps performed better than large caps in September 2025, with Nifty Midcap 100 rising by 1.4 percent and Nifty Small cap 100 returns rising by 2.0 percent. The price-to-earnings (P/E) ratio of Nifty 50 increased to 21.8 times in September from 21.5 times in the previous month.
Foreign Portfolio Investments (FPI)
Foreign portfolio investments recorded outflows of USD 2.7 billion from the equity market in September 2025, making it the third consecutive month of outflows. However, net inflows in the debt market were at USD 1.4 billion in September, marking the third consecutive month of net inflows.
Domestic Institutional Investors (DIIs) continued to remain net investors in the equity market in September 2025, investing USD 7.4 billion in the domestic equity market.
Commodity Market Trends
Gold prices in London Bullion rose by nine percent on a month-on-month basis to reach an all-time high of USD 3,665.2 per troy ounce. The rate cut by the US Federal Reserve in early September made the safe-haven asset more attractive.
The international price of crude oil remained relatively stable in September 2025, with Indian basket crude oil rising to USD 69.6 per barrel from USD 69.2 per barrel in the previous month—an increase of 0.6 percent.
Currency Market Dynamics
Amidst lingering trade tensions between India and the US, the Indian Rupee (INR) continued to depreciate against the US Dollar (USD). In September 2025, INR depreciated to an average of Rs. 88.32 per USD from Rs. 87.52 per USD in the previous month, a depreciation of 0.91 percent. This was the fourth consecutive month that the INR had depreciated against USD.
Interest Rates and Government Securities
The yield on Government securities (G-secs) of short-term and long-term maturity periods hardened. The yield on 1-year residual maturity G-sec rose by three basis points to 5.63 percent in September 2025. The benchmark 10-year G-sec yield rose to a six-month high of 6.5 percent in September 2025.
Consumer Price Index (CPI)
Consumer price index fell to an 8-year low of 1.5 percent in September 2025. Deflation in food prices was the main driver behind this fall in inflation. Food inflation deepened to 2.3 percent in September 2025, representing the steepest deflation in five months.
Wholesale Price Index (WPI)
Wholesale Price Index inflation eased to 0.1 percent in September 2025, down from a 1.9 percent rise in September 2024 and 0.5 percent in August 2025. Core inflation edged up to 1.8 percent in September 2025, compared to 0 percent a year earlier.
Index of Industrial Production (IIP)
India's Index of Industrial Production grew by 4 percent in August 2025. Electricity production rose by 4.1 percent, mining activity expanded by 6 percent, and manufacturing output grew by 3.8 percent. Under the use-based classification, infrastructure and construction goods maintained strong growth momentum with output surging by 10.6 percent.
Management Speaks
Inclusive Pensions, Innovative Solutions: Strengthening Retirement Security in India
Shri S. Ramann, Chairperson of PFRDA, delivered the welcome address at the Inauguration of the NPS Diwas Conference on October 1, 2025. He highlighted the significance of NPS as one of India's most robust and inclusive retirement saving schemes.
- NPS has more than 9 crores subscribers with AUM of Rs. 15.5 crores as on August 31, 2025
- CAGR return from the market is more than 9% over the last fourteen years
- Atal Pension Yojana has shown remarkable growth with more than 8.25 crore enrolments and AUM of Rs. 47,971 crores
- Multiple Scheme Framework (MSF) is a significant step forward in expanding the outreach of NPS in the non-government sector
Expanding NPS Reach and Innovation
In an interview with LiveMint on October 29, 2025, Chairperson Ramann emphasized that "NPS requires more options and innovation, not control." He discussed the Multiple Scheme Framework, which allows up to 100% equity allocation compared to the earlier 75% cap, enabling Pension Fund Managers to design and manage multiple schemes across asset classes.
Growth Expectations for FY26
According to an interview published in Business Standard on October 8, 2025, Chairperson Ramann expressed confidence that NPS would grow over 30% in FY26. He mentioned that growth has been around 28 percent year-on-year for the past few years, and the authority aims to be ambitious in pushing ecosystem partners to increase uptake, especially in the informal sector.
Global Pension Sector Trends in 2025
Aging Populations and Projections
According to the WHO, globally, life expectancy at birth reached 73.3 years in 2024, an increase of 8.4 years since 1995. The number of people aged 60 and older worldwide is projected to increase from 1.1 billion in 2023 to 1.4 billion by 2030.
In India, the current elderly population (aged 60 and above) is at 153 million and is expected to double to 347 million by 2050, highlighting the critical need for robust pension systems.
Global Pension Assets
As per the OECD report on Pension Markets in Focus, global pension assets were at USD 61.5 trillion at the end of 2024 for 38 OECD countries and USD 63.1 trillion including 36 select participating non-OECD countries. The USA holds the largest amount of global pension fund assets at USD 42.90 trillion, followed by Canada at USD 3.54 trillion and UK at USD 2.93 trillion. India's pension fund assets are estimated at USD 0.557 trillion.
Asset Allocation Trends
The Global Pension Assets Study 2025 highlights shifting investment strategies among pension funds:
| Asset Class | 2004 Allocation | 2024 Allocation | Change |
|---|---|---|---|
| Equity | 57% | 45% | -12% |
| Bonds | 29% | 33% | +4% |
| Other Assets (Real Estate & Alternatives) | 13% | 20% | +7% |
| Cash Instruments | 2% | 2% | No Change |
Global Retirement Age Trends
An increasing trend in global retirement ages has been observed due to factors like increased life expectancy, declining fertility rates, and fewer people entering the workforce. Notable examples include:
- Denmark: Raising state pension age from 67 to 70 by 2040, phasing in age 68 in 2030 and age 69 in 2035
- China: Retirement age for men shifting from 60 to 63, with women's retirement age also increasing accordingly
- India: Maintained at 60 years for both men and women
Technology in Pension Sector
Pension funds are increasingly investing in robust governance frameworks, enhanced data analytics, and AI-driven risk controls. According to a 2025 survey by the Pensions and Lifetime Savings Association (PLSA) in the UK, pension fund members expect AI adoption by 2035 for:
- Enhancing member engagement and communication strategies (79%)
- Detecting and preventing fraud (75%)
- Improving data security (72%)
- Personalizing retirement planning (63%)
- Allowing customization of investment strategies (59%)
New Pension Schemes in India
Unified Pension Scheme (UPS)
The Unified Pension Scheme has been introduced effective April 1, 2025, for Central Government employees as an option under the existing National Pension System architecture. UPS provides assured payouts based on the pay, qualifying service, benchmark corpus, and individual corpus of the subscriber.
NPS Vatsalya Scheme
The NPS Vatsalya Scheme was launched on September 18, 2024, as a contributory pension scheme for Indian citizens under the age of 18. It aims to encourage early retirement planning for children by enabling parents/guardians to invest on their behalf. The scheme allows for flexible contributions and investment options, with a minimum annual contribution of Rs. 1,000.
Retirement Saving: Every Age is the Right Age to Start Saving
According to the bulletin's article by Pravesh Kumar, Chief General Manager at PFRDA, retirement planning should not be deferred. The analysis provided demonstrates that every age is the correct age to start long-term financial savings:
| Entry Age | 25 | 30 | 35 | 40 | 45 |
|---|---|---|---|---|---|
| Accumulation @ 8% at age 60 | 5.40X | 4.08X | 3.13X | 2.42X | 1.90X |
| Accumulation @ 9% at age 60 | 6.90X | 5.01X | 3.69X | 2.75X | 2.08X |
Singapore's CPF and MediSave System
Overview
Singapore's Central Provident Fund (CPF) Board and MediSave plan form the cornerstone of the country's social security and healthcare financing framework. The CPF is a fully funded defined contribution pension scheme that requires employees and employers to contribute a fixed percentage of the employee's monthly wages into individual CPF accounts.
CPF Account Structure
Every CPF member's contributions are distributed into three main accounts:
- Ordinary Account (OA): Used for housing purchases, education, insurance, and approved investments
- Special Account (SA): Reserved for retirement savings and retirement-related financial instruments
- MediSave Account (MA): Dedicated to healthcare expenses such as hospitalization, surgeries, outpatient treatments, and insurance premiums
Recent MediSave Enhancements (2025)
- MediShield Life Enhancements (April 2025): Expanded coverage and higher claim limits with inclusion of new cost-effective treatments. Premiums are capped at a 35% rise phased over three years (2025-2028)
- MediSave Top-ups for Seniors: Eligible seniors received targeted top-ups ranging around SGD 450 to SGD 500
- Matched MediSave Scheme (MMSS) - Starting 2026: Encourages cash top-ups by matching contributions dollar-for-dollar up to SGD 1,000 annually
- Health Insurance Planner Tool: Online tool launched for projecting MediSave balances and healthcare financing needs
Key Regulatory Updates and Circulars
Guidelines on Cybersecurity Incidents (September 2025)
PFRDA issued guidelines classifying cybersecurity incidents into four levels based on impact: Critical, High, Medium, and Low, with specific criteria for each classification.
Multiple Scheme Framework (MSF) - September 2025
The MSF allows non-government sector subscribers to hold and manage multiple investment schemes within NPS, departing from the previous single-scheme structure. Key features include:
- Persona-Targeted Schemes for specific groups (self-employed professionals, digital-economy workers, corporate employees)
- Each scheme must offer at least Moderate and High-risk variants with equity exposure up to 100% for high-risk
- Total charges for Pension Funds capped at 0.30% of AUM annually
UPS Options for Eligible Central Government Employees (September 2025)
A one-time option was provided for Central Government employees who joined service between April 1, 2025, and August 31, 2025, to opt for the Unified Pension Scheme, with a deadline of September 30, 2025.
Expansion of Pension Agents Network (September 2025)
Points of Presence are now permitted to engage expanded categories of "other persons" as Pension Agents, including non-individual intermediaries registered with financial sector regulators and government departments related to labour welfare and community services.
NPS and APY Statistics (As of September 30, 2025)
Subscriber Growth
The National Pension System and Atal Pension Yojana continue to show robust growth:
| Segment | Subscribers (in lakhs) | YoY Growth (%) | Share (%) |
|---|---|---|---|
| Central Government | 28.48 | 6.6% | 3.2% |
| State Government | 74.06 | 9.7% | 8.2% |
| Corporate NPS | 25.03 | 16.7% | 2.8% |
| All Citizen NPS | 45.19 | 18.3% | 5.0% |
| Atal Pension Yojana | 690.63 | 15.9% | 76.9% |
| Grand Total | 898.27 | 14.7% | 100.0% |
Contribution Growth
Contributions to NPS and APY schemes have grown significantly with total contributions reaching Rs. 11,43,639.80 crores as of September 30, 2025, representing a year-on-year growth of 22.1 percent.
Annual Survey of Industries (ASI) 2023-24
Key Highlights
- Gross Value Added (GVA): Grew by 11.89% over the previous year
- Industrial Output: Increased by more than 5.80% over the previous year
- Average Emoluments: Grew by 5.6% compared to 2022-23
Top Industries by GVA
The top 5 industries in terms of Gross Value Added are:
- Basic Metal
- Motor Vehicles
- Chemical and Chemical Products
- Food Products
- Pharmaceutical Products
Top States by Employment
The top 5 states in terms of manufacturing employment are Tamil Nadu, Gujarat, Maharashtra, Uttar Pradesh, and Karnataka.
Conclusion
The Pension Bulletin (September-October 2025) reflects a dynamic period for India's pension ecosystem. With the introduction of innovative schemes like the Multiple Scheme Framework, robust growth in NPS and APY subscriber bases, and global recognition of India's pension architecture, the sector is positioned for sustained expansion.
Key takeaways include the importance of starting retirement planning early regardless of age, the need for greater accessibility through multiple scheme options, technological innovation in pension administration, and the government's commitment to inclusive pension coverage across all segments of society.
As India progresses toward achieving comprehensive pension coverage as envisioned in the Viksit Bharat 2047 agenda, continuous regulatory refinement and stakeholder engagement remain crucial for strengthening retirement security for all citizens.
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