With average pension pot of ₹5 lakh at 60, Indians choosing not to retire


The corpus of an average National Pension System (NPS) subscriber at retirement or at the maturity age 60 years is a shade under 5 lakh, according to Pension Funds Regulatory and Development Authority (PFRDA) data.

However, most subscribers continue to contribute to the scheme even after 60 years, the government told the just-concluded Lok Sabha session.

There is wide divergence between government and private sector employees in terms of the corpus size. The average central government employee’s pension corpus stands at 13 lakh, while for state government employees it is around 5.4 lakh. The average corporate sector subscriber has a pension pot of 18 lakh.

Unorganized sector workers, the largest subscriber segment under the ‘all citizen’ model of NPS, retire with just 2.89 lakh.

While NPS subscribers have to use 40% of the accumulated corpus to buy a pension plan, they get bare minimum payouts due to low annuity rates.

According to projections of the pension amount by the National Securities Depository Ltd, a central record-keeping agency under NPS, based on annuity rates offered by various insurance firms in the system, a 60-year-old male subscriber with a 5 lakh corpus would fetch a maximum rate of 6.31%. This translates into a maximum monthly pension of 2,616.

For a subscriber opting for an annuity for life (without getting back purchase price), the maximum pension will be 4,353 per month. The PFRDA is exploring alternative plans, such as systematic withdrawal plans, under NPS.

Most subscribers opt to continue with their contributions building up their pension savings, as the monthly pension is not adequate.

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