PFRDA chief puts India’s retirement-income replacement rate at 35–40% versus 60% global level
PFRDA Chairman S. Ramann stated that India's retirement-income replacement rate is currently 35-40%, significantly lower than the global average of 60%. The regulator is focusing on expanding pension coverage through the NPS and APY while encouraging citizens to increase long-term savings.
Why it matters
Low replacement rates pose a significant long-term economic risk for India's aging population, highlighting the urgent need for increased financial literacy and retirement planning.
India’s retirement-income replacement rate is currently around 35–40%, compared with a roughly 60% level globally, according to Pension Fund Regulatory and Development Authority (PFRDA) Chairman S. Ramann, as the regulator seeks to cover 30 crore people through the National Pension System (NPS) and Atal Pension Yojana (APY) over the next four to five years.
“Roughly, the world says your replacement rate should be about 60%. So 60% of your last pay should roughly be the kind of money that you get when you are in retirement mode. In India, it’s in the region of about 35% to 40%,” Mr. Ramann said during an interaction in Chennai on Friday.
“So we have to encourage people to invest more. That’s the only way,” he added.
The question of how much people need to save for retirement came up as PFRDA seeks to expand pension coverage beyond government employees.
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