Gig workers are opening NPS accounts at a steady clip, says HDFC Pension CEO

Underlining the need for a differentiated approach to the National Pension System (NPS) for retail individuals, Sriram Iyer, MD and CEO of HDFC Pension Fund Management, said the company’s partnerships with platform companies have led to a steady inflow of gig workers opening retirement savings accounts.

HDFC Pension is licensed as a Pension Fund and a Point of Presence for the NPS. It has onboarded three such companies, Zomato, Urban Company and Goa Miles, and more than 3 lakh gig workers on these platforms have opened NPS accounts.

HDFC Pension is now in talks with more such companies to enable gig workers to save for retirement and has recently also signed up Yes Madam for this.

“We are starting to see a big pick-up in subscribers from this category of workers,” he said in an interaction with Business Today, noting that the NPS e-Shramik model has provided adequate flexibility to these workers in terms of making contributions.

The Pension Fund Regulatory and Development Authority launched the NPS e-Shramik (Platform Service Partner) Model in October last year, noting that while the platform economy has seen huge growth, gig workers or service partners remain outside the traditional social security framework, including retirement planning.

The scheme does not have a minimum or maximum contribution threshold and also permits the platform aggregator and the worker to set a minimum contribution for each instance of credit to the individual pension account. The onboarding and KYC processes have also been kept simple.

Iyer said HDFC Pension is now also looking at other segments, such as milk cooperatives, to enable their members to open retirement accounts under the NPS. “There is a need to approach all segments of society in different ways to make them aware of the need for retirement savings and encourage them to open NPS accounts,” he said.

Adoption of the Corporate NPS has remained strong, he said, adding that NPS for retail individuals requires more awareness and communication.