Discover insights into India's pension landscape. From NPS flexibility to top-performing fund managers, explore benefits and returns for a secure retirement.
Overview on National Pension Scheme in India
The National Pension Scheme (NPS) is a popular investment option among Indians looking to save for retirement. The scheme, launched by the Government of India, offers a tax-efficient and market-linked investment option for individuals. However, calculating the returns on your NPS investment can be a complex task, considering the multiple variables involved.
That’s where NPS calculators come in. These online tools help you estimate the returns on your investment based on various parameters, such as investment amount, tenure, expected returns, and asset allocation. With several NPS calculators available in the market, choosing the right one can be confusing.
Top Performing NPS Schemes 2023
In the realm of pension-oriented products in India, the National Pension Scheme (NPS) stands tall as one of the most favoured choices. This program was introduced by the Central Government as part of their commitment to ensuring social security for all citizens of India. NPS provides an avenue for individuals employed across both public and private sectors to make investments that combine prudence with potential rewards.
The heart of the NPS scheme lies in its flexibility. It offers various investment options, including low-risk equity funds, security funds, and alternative investments, all of which promise good returns. By opting for NPS, you’re taking a step beyond the conventional fixed-income schemes. Plus, there’s an added bonus in the form of tax benefits. Depending on the type of account you hold (Tier-I or Tier-II), you can avail tax benefits of up to ₹ 1.5 lakh under Section 80C and Section 80CCD of the Income Tax Act, 1961.
One remarkable feature of the NPS is its long-term perspective. While the funds you invest are locked in until your retirement, there are provisions for unforeseen financial needs. In certain situations, you can withdraw your funds prematurely, offering a safety net for unexpected financial emergencies.
What truly sets the NPS apart is its personalised approach. The scheme empowers you to make decisions about the allocation of your investments. You have the freedom to choose between automatic and manual allocation. Opt for the active choice, and you’re in control of crafting your investment plan and deciding the percentage of funds you wish to allocate to different avenues. Alternatively, the auto choice takes the wheel, making investment decisions based on your risk profile and overall assessment.
Pension Fund Managers
In the intricate landscape of retirement planning in India, ten distinguished pension fund managers hold the reins. Each of these entities plays a pivotal role in safeguarding and growing the financial futures of countless individuals.
- SBI Pension Funds Pvt. Ltd.: An integral player that strives to optimise pension investments for a secure tomorrow.
- LIC Pension Fund Ltd.: An institution backed by experience and expertise, entrusted with managing pension funds with the utmost diligence.
- UTI Retirement Solutions Ltd.: A dedicated partner on the journey to retirement, fostering financial stability through prudent fund management.
- HDFC Pension Management Co. Ltd.: Committed to turning aspirations into reality by skillfully managing pension assets.
- ICICI Prudential Pension Fund Management Co. Ltd.: Blending prudence with innovation, offering a solid foundation for retirement goals.
- Kotak Mahindra Pension Fund Ltd.: Pioneering pension fund management, offering tailored strategies for a prosperous retirement.
- Aditya Birla Sunlife Pension Management Ltd.: Illuminating the path to retirement with astute financial management and forward-looking solutions.
- Tata Pension Management Ltd.: A trusted steward steering pension investments towards a horizon of financial well-being.
- Max Life Pension Fund Management Ltd.: A partner in securing life’s later years, unwaveringly dedicated to pension fund growth.
- Axis Pension Fund Management Ltd.: Navigating the complexities of retirement investments, fostering stability and growth.
Among these, a trio holds a distinctive responsibility: SBI Pension Fund, LIC Pension Fund, and UTI Retirement Solutions. These three stalwarts take on the crucial task of managing pension contributions for government employees under the National Pension Scheme (NPS). Their meticulous management ensures that public servants have a reliable and sound financial foundation to rest upon as they step into the realm of retirement. To help you make an informed decision, we have reviewed and compared the top NPS calculators in India.
Top Performing NPS Fund Managers – Central Government Scheme
| Asset Management Companies | SBI Pension Fund | UTI Retirement Solutions | LIC Pension Fund |
| Net Asset Value (NAV) | 38.5524 | 37.3377 | 37.5511 |
| Performance Metrics | |||
| 1-year Returns | 4.00% | 3.96% | 4.09% |
| 3-year Returns | 7.63% | 7.78% | 8.02% |
| 5-year Returns | 8.20% | 8.09% | 8.18% |
By January 31st, 2023, SBI Pension Fund stood as a star performer, achieving remarkable 8.20% returns over the past five years within the NPS Central Government Scheme. Its strategic investments predominantly focus on government securities, state development loans, and the banking sector. Following closely, LIC Pension Fund demonstrated solid performance with 8.18% returns during the same span. UTI Retirement Solutions also made a strong showing, securing returns of 8.09% over the past five years. These figures underscore their commitment to optimising investments and sustaining financial growth within the pension landscape.
Best Performing NPS Fund Managers 2023 – State Government Schemes
| Pension Fund Managers | SBI Pension Fund | LIC Pension Fund | UTI Retirement Solutions |
| Net Asset Value (NAV) | 33.0798 | 33.4273 | 33.2237 |
| Returns | |||
| 1-year | 3.97% | 4.14% | 4.00% |
| 3-year | 7.54% | 7.92% | 7.74% |
| 5-year | 8.18% | 8.11% | 8.08% |
Over the past five years within the NPS state government scheme, SBI Pension Fund emerged as a frontrunner, attaining impressive returns of 8.18%. The fund’s focus on the financial sector, particularly banking and state development loans, played a pivotal role. Close on its heels, LIC Pension Fund showcased strong performance, securing noteworthy returns of 8.11% during the same duration. These figures underline the prowess of these funds in optimising investments and achieving financial growth within the context of the state government pension landscape.
Best Performing NPS Tier-I Returns 2023 – Scheme E
| Pension Fund Managers | Returns (as of 31st Jan 2023) |
| 1-year | 3-year | 5-year | |
| SBI Pension Fund | 2.44% | 14.05% | 9.65% |
| LIC Pension Fund | 4.37% | 15.27% | 9.64% |
| UTI Retirement Solutions | 3.15% | 14.70% | 9.83% |
| ICICI Prudential Pension Fund | 2.48% | 14.72% | 9.99% |
| Kotak Mahindra Pension Fund | 2.96% | 15.05% | 10.21% |
| HDFC Pension Management | 3.00% | 14.93% | 10.82% |
| Aditya Birla Sunlife Pension Management | 2.83% | 13.93% | 9.83% |
Note: The returns for Tata Pension Fund, Max Life Pension Fund, and Axis Pension Fund aren’t available as they were introduced in August 2022, September 2022, and October 2022, respectively.
Fund Managers Generating the Best NPS Tier-I Equity Funds Returns on Various Terms (as of 31st Jan 2023)
| Term | Best Returns | Pension Fund Manager |
| 1-year | 4.37% | LIC Pension Fund Ltd. – Scheme E – TIER I |
| 3-year | 15.27% | LIC Pension Fund Ltd. – Scheme E – TIER I |
| 5-year | 10.82% | HDFC Pension Fund – Scheme E – TIER I |
Top Performing NPS Tier-II Returns 2023 – Scheme E
| Pension Fund Managers | Returns (as of 31st Jan 2023) |
| 1-year | 3-year | 5-year | |
| SBI Pension Fund | 2.69% | 14.20% | 9.73% |
| LIC Pension Fund | 4.41% | 15.31% | 9.78% |
| UTI Retirement Solutions | 3.08% | 14.73% | 10.03% |
| ICICI Prudential Pension Fund | 2.66% | 14.89% | 10.13% |
| Kotak Mahindra Pension Fund | 3.02% | 14.77% | 10.10% |
| HDFC Pension Management | 3.05% | 14.85% | 10.74% |
| Aditya Birla Sunlife Pension Management | 2.91% | 14.10% | 9.81% |
Fund Managers Generating the Best NPS Tier-II Equity Funds Returns on Different Tenures (as of 31st Jan 2023)
| Term | Best Returns | Pension Fund Manager |
| 1-year | 4.41% | LIC Pension Fund Ltd. – Scheme E – TIER II |
| 3-year | 15.31% | LIC Pension Fund Ltd. – Scheme E – TIER II |
| 5-year | 10.74% | HDFC Pension Fund – Scheme E – TIER II |
FAQs
What is the current interest rate of NPS?The NPS interest rate is tied to the market, historically fluctuating between 9% and 12% annually. In contrast, the ongoing annual return for the Public Provident Fund stands at 7.10%. |
What are the tax benefits under NPS?Workers participating in NPS can avail the subsequent tax advantages on their personal contributions: Tax deduction of up to 10% of their salary (Basic + DA) under section 80 CCD(1), encompassed within the overall limit of ₹ 1.50 lakh specified by Sec 80 CCE. |
Which investment is better than NPS?If flexibility and liquidity hold significance for you, then opting for the SIP approach to invest in mutual funds undoubtedly surpasses NPS. By choosing the SIP route for equity investments, you can potentially retire earlier and initiate a systematic withdrawal plan to receive monthly funds, a feature not available with NPS. |
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