Subroto Das, a former chief general manager at PFRDA, India’s pension supervisor, sets out some important lessons for UK regulators ahead of the introduction of Value for Money, taken from a recent research paper.
In 2022, India’s pension regulator accepted a custodian fee from Deutsche Bank of 0.00000000177% a year for the country’s National Pension Scheme. That figure is not a misprint.
Applied to the entire £1.47trn UK defined contribution (DC) asset base, that rate would yield approximately £26 a year. The typical UK institutional custody charge of 0.02% a year costs £294m on the same basis.
“India’s National Pension Scheme is not a third-world experiment. It is an operational proof of concept for reforms the UK is now mandated by statute to deliver.”
Subroto Das
If Deutsche Bank decided that Indian retirees deserved that fee schedule, the Pensions Regulator (TPR) has every right to ask why UK retirees should pay 565,000 times more. What is sauce for Indian prime minister Narendra Modi is sauce for his UK counterpart Sir Keir Starmer.
Saving money through existing powers
The regulator that accepted that fee was the Pension Fund Regulatory and Development Authority (PFRDA), India’s pension supervisor, and TPR’s closest international counterpart. This makes the custody fee differential not an exotic curiosity but a directly relevant benchmark that UK pension policymakers have not used – yet.
This is not to suggest that UK custody ought to be priced at £26 a year. The arithmetic of viability is beside the point. Even with a generous 20-fold multiplier, the annual charge rises only to £520, scarcely enough to cover Deutsche Bank’s electricity for an afternoon. That is not the proposition.
What the figure discloses is something else entirely: Deutsche Bank judged the National Pension Scheme (NPS) mandate worth having at that rate. If such a judgment is commercially defensible in Delhi, then the same institution, seated at a London table with a far larger asset base, can hardly maintain a principled objection to a mandatory competitive tender. Particularly when the precedent is its own.
The mechanism is straightforward. TPR already holds this authority. A mandatory competitive tender for UK DC pension custody, with the PFRDA rate as the anchor, requires no primary legislation and no new regulatory powers. TPR has every right to squeeze the melon.
The saving would be approximately £294m annually, but more important than the number is the precedent: a regulator that opens a custody tender against a PFRDA benchmark signals precisely what the Value for Money framework means in practice. Arithmetic is not the point. The posture is.
Custody is not the only line item worth examining. India’s National Pension Scheme operates with 10 competing pension fund managers under a regulated fee structure with an upper band of 0.09% on smaller asset pools, declining to 0.03% at megafund scale. The 10 real commercial entities accepted these rates in a genuinely competitive market. They are verified outcomes, not targets.
Reducing the system-wide average UK DC fund management charge from 0.75% to 0.15%, anchored on the NPS upper band, would generate annual savings of approximately £8.8bn. For members already in large master trusts where charges average approximately 0.4%, the saving from that ceiling alone is £3.7bn.
Dashboards and small pot consolidation
A third observation concerns the Pensions Dashboards Programme. When a systemic data reconciliation problem accumulated in the NPS’s early years, it was resolved not by mandating better behaviour from contributors but by redesigning the interface so that correct behaviour became the only possible one.
With the October 2026 dashboard connection deadline bearing down on pension schemes of every size, that experience is worth examining. Where compliance requirements alone are not moving behaviour, smarter interface design may achieve what enforcement cannot.
Beyond the connection deadline, the harder question is what the dashboards ecosystem should become once connected. The NPS’s Central Recordkeeping Agency (CRA) is not a display system; it is a transactional infrastructure. Contributions flow through it, reconciliation happens within it, and member-facing interfaces are downstream of it rather than parallel to it.
Fairness requires acknowledging that the NPS had a structural advantage: it was a greenfield project with no legacy systems, no heterogeneous data standards accumulated over three decades since the Pensions Act 1995. Any comparison that glosses over that deserves the impatience it receives from dashboard practitioners.
The asymmetry is real. It is not, however, a reason to forgo the structural lesson. The UK’s Small Pots Data Platform is a step toward the transactional infrastructure the NPS CRA represents. But the more durable solution is prevention rather than remedy.
The NPS achieves this through the Permanent Retirement Account Number, or PRAN, a unique lifetime identifier that travels with the subscriber across every employment transition, making fragmentation architecturally impossible. (Incidentally, ‘pran’ means ‘life’ in Sanskrit and in several Indian languages.)
A UK Pension Identification Number, directly analogous to the PRAN, would do the same. The Pension Schemes Act 2026 addresses the existing stock of orphaned pots. A PIN system would prevent the next generation from forming.
Ninety-four million accounts. One number each. We are PINning our hopes on PIN.
“The UK has spent the past decade legislating towards an architecture that has been running in Delhi since the Blair government was still in office.”
Subroto Das
Time to act for the future of DC
India’s NPS is not a third-world experiment. It is an operational proof of concept for reforms the UK is now mandated by statute to deliver. Annual total charges of 0.09% to 0.15% across 94 million accounts. These are not projections. They are operating results.
A country that invented the actuarial profession and runs the world’s second-largest investment management industry has spent the past decade legislating towards an architecture that has been running in Delhi since the Blair government was still in office.
The implementation regulations that will follow the Pension Schemes Act 2026 represent a time-limited opportunity to learn from a system that has already made the design choices now facing UK policymakers. That opportunity should not require another decade to take.
Subroto Das is a former chief general manager at PFRDA, India’s pension supervisor. This piece draws on his working paper, Cross-Border Pension Innovation: Applying India’s NPS Architecture to UK Defined Contribution Challenges.
