Integrating NPS into payroll alongside PF should be easy: PFRDA chief

Speaking at the Business Standard BFSI Insight Summit 2026, PFRDA chief S Ramann said integrating NPS with corporate payrolls should be easy, enabling employees to save alongside EPF

Pension Fund Regulatory and Development Authority (PFRDA) Chairperson S Ramann on Tuesday said companies should be able to integrate National Pension System (NPS) contributions into their human resource management software (HRMS). This would allow employees to contribute to NPS through salary deductions alongside their Employees’ Provident Fund (EPF) savings.

 

“If we can run UPI for 70 or 80 crore people in our country, this is child's play,” Ramann said at the fifth edition of the Business Standard BFSI Insight Summit 2026 in Mumbai.

 

“It is a matter of the HR team in a particular corporate looking at a patch in their HRMS software, which simply says you can deduct NPS,” he said.

 

 

“We are already talking to several HRMS providers in the country” to make the integration possible, Ramann said during the discussion moderated by Business Standard’s Vikas Dhoot.

NPS integration through payroll systems

Ramann was responding to a question on whether employees could maintain an EPF account and open a separate NPS account to build their retirement savings.

 

He said integrating NPS contributions into corporate payroll systems should be straightforward and would help make the scheme accessible to more employees.

 

“Saying, how do we just introduce NPS onto the sort of salary deduction, and it should be fairly easy,” Ramann said.

 

He also called for greater coordination between pension regulators to improve the efficiency of long-term investments.

 

Ramann said the regulatory forum was created to facilitate such cooperation, adding that customers should have a choice between the two systems.

 

“If customers are to have a better choice, let them see competition between these two systems. They should be able to take the best pick for themselves,” he said.

Pension coverage remains a challenge

Ramann said expanding pension coverage beyond government employees remained a key challenge for India.

 

When he joined PFRDA in June 2025, the non-government sector had 7.2 million NPS accounts, he said. The number had increased by about 2.2 million over the following 12 months.

 

“We need to be able to make that number go into the several crore, and that is really what we're going to do,” he said.

 

He identified distribution and collection, investment, and the payout of accumulated retirement savings as three key areas requiring attention.

 

Ramann also discussed the Atal Pension Yojana (APY), which provides a defined pension benefit to eligible subscribers. He said the regulator was examining ways to improve the scheme's pension payouts through changes in asset allocation.

 

“We are already working out through our teams, and again a lot of financial modelling is going behind it. How do we make that ₹1,000 become inflation-indexed?” he said.

 

Ramann said APY had about 90 million subscribers and that the regulator wanted to expand its reach.

Pension funds could support infrastructure investment

Ramann said pension funds could provide long-term capital for infrastructure projects, where investment horizons often extend beyond the periods typically served by bank financing.

 

“Without doubt, world over, every country has grown on the back of its pension because that is the true patient capital that's available,” he said.

 

He said pension funds could consider investing at different stages of infrastructure projects, including after operations begin, when some execution risks may have reduced.

 

However, he said investment guidelines would need to be carefully designed, and pension funds would require the skills to assess such investments.

 

“Everybody is going to be cautious, but it's about getting the right skills to be able to do the right job,” Ramann said.

 

He added that a committee was examining how pension funds could participate more actively in long-term investments.

 

Ramann also said PFRDA had begun allocating NPS money to alternative investment funds (AIFs), describing it as an initial step towards expanding investment options.

More flexibility in retirement payouts

Ramann said pension products also needed to account for longer life expectancies and the need for retirement income to last longer.

 

He referred to an actuarial study comparing annuity payouts offered by insurance companies with an alternative structure involving pension funds. According to Ramann, the study found a difference of 200 basis points between the two approaches.

 

“The law says that you need to have an annuity given by a life insurance company, but remember, in 2004 we knew no better. We only knew of an annuity from a life insurance company,” he said.

 

Ramann said changes to the law could allow more players to develop pension products, while retaining safeguards for subscribers.

 

“We need to allow for more players to come to your point on innovation. We need to allow pension funds to be able to come up with more innovative products, but as regulator, we sit in between ensuring that there is caution,” he said.

 

He said the regulator would need to balance flexibility with the responsibility to protect retirement savings.

 

“We don't want wrong investments, and then subscribers will end up waiting for the money to come at the 75th birthday, and then, oh sorry, your money runs out,” Ramann said.

 

Ramann's remarks mostly centred on expanding NPS access beyond the government sector, including through payroll integration, while improving investment options and retirement payouts.