PFRDA December 2025 Bulletin Highlights Robust Assets Under Management (AUM) Growth and Decumulation Innovations
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Pension Fund Regulatory and Development Authority (PFRDA) | Ministry of Finance
The Pension Bulletin December 2025 shows that as of November 30, 2025, the Indian pension sector demonstrated significant expansion with the total subscriber base reaching 9.15 crore, a year-on-year (YoY) increase of 14.7%. The total Assets Under Management (AUM) swelled by 21.45% YoY to reach Rs. 16.46 lakh crore. Notably, the Atal Pension Yojana (APY) continues to dominate the subscriber landscape, accounting for 77% of the total base, while State Government employees hold the largest share of AUM at approximately 49.5%. Among Pension Fund Managers, SBI, LIC, and UTI maintain a combined market share of over 84%.
Decumulation and Addressing the Annuity Dilemma
The PFRDA Chairperson highlighted a strategic shift toward the decumulation phase, emphasizing that old age security requires more than simple annuitization. The Authority is exploring blended phased withdrawal products that combine systematic withdrawal plans (SWP) with life annuities to balance liquidity and longevity protection. These innovations are being tested through Proof of Concept (PoC) models to evaluate market uptake and operational feasibility. International benchmarks, specifically the Chilean SCOMP system, are being analyzed for their ability to improve price discovery and reduce commissions through centralized electronic marketplaces.
Innovation through the Multiple Scheme Framework
To further drive sector growth, the PFRDA is leveraging the Multiple Scheme Framework (MSF), which empowers Pension Funds to innovate beyond standard templates. This regulatory mechanism allows for the design of specialized products tailored to specific subscriber personas. The framework emphasizes the need for board-level expertise in actuarial sciences and investment to guide the development of these new offerings, ensuring they remain technically sound while becoming more appealing to a diverse range of investors.
Governance and Regulatory Revisions
To strengthen the ecosystem, the PFRDA has revised provisions for the Corporate Model NPS, mandating that employers review Pension Fund selections annually based on long-term performance. Furthermore, the Authority is advocating for enhanced Corporate Governance, recommending the inclusion of nominee and independent directors on the boards of Pension Funds. These measures aim to increase accountability and transparency as the sector plays an increasingly pivotal role in driving national economic growth.
What is the Pension Bulletin? The Pension Bulletin is a monthly publication by the Department of Policy Research, Market Watch, and Systemic Risk under the Pension Bulletin Editorial Committee. It provides a comprehensive overview of the Indian pension sector, including economic trends, corporate governance, international practices, and detailed statistics on NPS and APY growth, contributions, and returns.
What is the “Multiple Scheme Framework” (MSF) within the NPS architecture? The Multiple Scheme Framework is a regulatory structure that allows Pension Funds to innovate and design diverse investment schemes tailored to specific subscriber personas. Under MSF, subscribers gain the flexibility to choose between various asset classes and risk profiles, while Pension Funds are empowered to move beyond standard templates to offer specialized products like green bonds or sector-specific funds.
What is the "Annuity Dilemma" addressed in the PFRDA Bulletin? The annuity dilemma refers to the psychological and financial conflict retirees face when choosing between a life annuity, which offers guaranteed income but sacrifices liquidity, and a drawdown plan, which provides flexibility but risks the depletion of funds. The PFRDA addresses this by advocating for "Blended Products" that act as a middle ground, providing a guaranteed income floor while keeping a portion of the corpus invested in market-linked accounts to allow for discretionary spending or bequests.
Policy Relevance
The 2025 year-end data underscores the maturing of the Indian pension market, shifting focus from mere accumulation to sophisticated payout management strategies.
Pension Sustainability: The push for blended products addresses the “annuity dilemma” by providing cost-effective alternatives to traditional lifetime covers.
Institutional Maturation: Mandatory annual reviews for corporates and the move toward risk-based supervision signify a transition to a more active and accountable regulatory environment.
Follow the full report here: Pension Bulletin December 2025