Retirement financial planning focusing national pension system among state government employees in Kerala

Abstract

This study investigates the effectiveness of the National Pension System (NPS) among state government employees in Kerala with a particular focus on financial literacy, retirement financial planning, retirement confidence and financial dependence on NPS. The transition from the old pension scheme to the market-linked NPS has shifted the responsibility of retirement security to individuals highlighting the critical role of financial preparedness. The study evaluates the performance of pension fund managers and various pension schemes under NPS, assesses beneficiary perspectives and examines the interrelationship between financial literacy, retirement planning behaviour, financial dependence on NPS and retirement confidence. Using a structured questionnaire, primary data were collected from NPS beneficiaries employed in state government including aided and other public sector undertakings in Kerala. Through various statistical analysis including mediation and moderation models, the study explores how retirement financial planning mediates the relationship between financial literacy and retirement confidence and how financial dependence on NPS moderates this pathway. The findings provides empirical insights for policymakers, pension fund regulators and financial educators to strengthen the effectiveness of the NPS and enhance retirement security and confidence among its beneficiaries. It also highlights the importance of integrating personalised retirement planning tools and advisory services within the NPS framework to foster proactive financial behaviour. By addressing these gaps, NPS can evolve into a more inclusive and empowering retirement system that ensures long term financial well-being for all the beneficiaries of NPS.