Exactly ten years hence, in the year 2036, the scenario in India would have changed dramatically. The number of elderly persons would stand in excess of 200 million, which would double the numbers in 2011. Population sizes are reducing whereas the age of the people has increased. Therefore, the issue is not just about the income generation that happens currently, but it is about maintaining economic dignity when people retire and cannot work. A pension is not an investment plan. Though both these plans are used interchangeably, it does not mean that you go ahead and withdraw your pension like an ATM card.

NPS Sanchay is designed for investors who don't want to deal with the complexities of choosing a fund manager or asset allocation (equity, government bonds, or corporate bonds). The scheme is targeted at those in the unorganized sector. It will have a fixed investment structure, similar to the one in place for government employees since 2004. This scheme is for those who don't understand asset allocation but want a safe product that can generate good market returns. Based on data from the past 15 years, this structure has generated an average annual return of approximately 9.5%, significantly higher than many other government savings schemes and bank FDs.

Efforts are underway to make pension access as simple as opening a bank account or making a UPI payment. To achieve this, two major digital platforms are expected to launch within the next 30 days. Using UPI on the BHIM interface, you can open your NPS account in just two clicks. If you already have a savings account with a bank (like SBI), the UPI app will access your KYC information through your bank. You won't need to complete any additional paperwork. Once your account is opened, you can easily deposit funds through UPI anytime, any number of times.

This platform has been developed in collaboration with BSE StAR. It will enable all non-bank distributors and even rural Primary Agricultural Credit Societies (PACS) to become pension agents. This will facilitate the reach of NPS in tier-2 and tier-3 cities, as well as remote villages.

Currently, the commission (trail commission) on mutual funds is around 1.5%, while it is much lower in NPS. Digital distribution will not only reduce costs but also reach 500 million people who are currently outside the scope of any pension.

The most revolutionary change in the pension sector is going to be the "pension-health account." A proof-of-concept is underway. A portion of your pension fund will be reserved for health purposes. This will function as a top-up insurance. The first portion of hospital expenses will be covered from your health account, and the insurance company will cover the remaining amount, up to ₹5 lakh. The premium will be very low, as it will operate like a group policy.

Previously, you could withdraw 60% of your funds and receive an annuity (pension) of 40%. This has now been changed to 80:20. This means you can retain a larger portion of your deposit upon maturity. If your total corpus reaches ₹5 lakh, you can withdraw it at any time. The fear of a 15-year lock-in period is now gone. You can defer your annuity until you reach 75, and your money will continue to grow in tandem with market returns.