AMFI Pitches Mutual Fund-Based Retirement Account Scheme

The Association of Mutual Funds in India (AMFI), as part of its 30th anniversary, has released a visionary white paper titled “Empowering the Future – Mutual Funds: A Bridge to Financial Freedom and Vikasit Bharat”. The document underlines the growing urgency of retirement planning and recommends the launch of a Mutual Fund–Voluntary Retirement Account (MF-VRA), designed to provide structured retirement solutions for India’s working population.

Proposed MF-VRA Framework and Global Relevance 

The Mutual Fund–Voluntary Retirement Account (MF-VRA) has been designed as a voluntary, employer-linked scheme managed by mutual funds. Its key features include voluntary participation, employer sponsorship, portability, tax incentives, and a flexible structure.

The proposal also draws inspiration from global practices such as the US 401(k) plan, where employees contribute pre-tax income that is taxed only at withdrawal. Internationally, pension systems typically operate on multi-pillar frameworks, balancing government-backed social security with private defined contribution schemes. 

For India, the urgency is greater, with UN projections indicating that the population aged 60 and above will nearly double by 2050, surpassing the elderly population of Europe, making the expansion of retirement coverage a pressing national priority.

Industry Insights And Leadership Views

As per news reports, Navneet Munot, Chairman of AMFI, said: “This white paper is a reminder that retirement security must move from the periphery to the core of our financial priorities. It is a call for every working individual to start early, invest regularly, and stay the course.”

He further explained that such investments ensure personal independence while fuelling economic growth through channelled savings. Munot added, “Rising life expectancy, evolving family structures, and growing aspirations have made retirement planning an essential life goal rather than a distant afterthought. The years beyond active work can now span decades, a phase that must be sustained by foresight, discipline, and prudent investing.”

Venkat Nageswar Chalasani, Chief Executive of AMFI, also raised concerns over the serious lack of preparedness for retirement, pointing out the absence of mandatory savings provisions in the current system.

Current Scenario And Outlook

As per news reports, at present, there are 29 mutual fund retirement schemes in India with a combined assets under management (AUM) of ₹29,105 crore. The white paper stresses that enhancing this landscape through a structured MF-VRA would significantly widen coverage and provide financial stability for future retirees.

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Conclusion

The AMFI proposal represents more than just a new product idea; it highlights a strategic need for India’s workforce to embrace retirement planning at an early stage. With the elderly population rising sharply and existing schemes falling short, the introduction of the MF-VRA could reshape pension coverage, secure financial independence for millions, and support India’s vision of becoming a developed nation by 2047.

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