The National Pension System (NPS) portfolio comprises four categories of asset class: equity, corporate debt, government bonds and alternative investment funds. The investors can choose any of the seven pension fund managers to manage their investments.
Here we assess the returns delivered particularly on equity assets across different pension fund managers, also known as PFMs.
Another thing that one must keep in mind is that the NPS investments are of two kinds: Tier I and Tier II. The Tier I investment is a long-term and the amount cannot be withdrawn until retirement whereas Tier II NPS accounts act as a voluntary savings account.
This is why, we only look at the returns delivered on NPS Tier II investments:
Five-year returns
Upon going through the returns as shared by NPS Trust, the past five-year returns given by different pension fund managers range between 10 to 11 percent.
SBI PF gave a return of 10.07 percent, LICPF offered a return of 10.02 percent, UTIRSL delivered 10.84 percent in past five years, ICICI PF gave 10.63 percent.
The corresponding returns for Kotak MF were 10.36 percent and for HDFC PF, the returns were 11.34 percent per annum and for Birla PF, the rate of return was 11 percent.
The benchmark index’s return for five years was 11.64 percent.
Returns given by different pension fund managers:
| Pension fund managers | 5-year-return (%) |
| SBI PF | 10.07 |
| LICPF | 10.02 |
| UTIRSL | 10.84 |
| ICICI PF | 10.63 |
| Kotak PF | 10.36 |
| HDFC PF | 11.34 |
| Birla PF | 11 |
(Source: NPS Trust)
Three-year returns:
The past three-year returns given by NPS pension fund managers ranged between10 to 11.45 percent.
The returns delivered by SBIPF was 10.03 percent. The CAGR given by LIC PF was 10.92 percent, 10.91 percent by UTIRSL, 10.84 percent by ICICI PF, 10.90 percent by Kotak PF, 11.58 percent by HDFC PF and 11.44 percent by Birla PF. The 3-year return of benchmark index was 11.82 percent.
Recently, National Pension System (NPS) Trust enabled subscribers to change asset allocation four times in one year. This is meant for those subscribers who have opted for active asset allocation choice to tweak their portfolio in line with fluid market condition and with their risk appetite.
Prior to this, subscribers could change their asset allocation two times in one year.
There are a number of other initiatives as well that are to be launched by the NPS Trust. PFRDA, for instance, is set to permit 100 percent investment in equity under Tier -II accounts.
