PremiumNational Pension System (NPS), a government-sponsored pension scheme, was launched in January 2004 for government employees. It was opened to all citizens in 2009. NPS offers various funds and asset classes for the subscriber to choose from depending on her risk appetite and needs. Here we will look at the best performing pension fund manager under the Central Government Plan, State Government Plan, Tier I Equity Plan and Tier II Equity Plan.
NPS gives the option to invest in four asset classes namely- equities, government securities, corporate debt and Alternative Investment Funds or AIFs. An NPS subscriber has to first choose the pension fund manager and then chose the investment option. A subscriber can choose from- Active option or Auto option to invest in the above mentioned asset classes. NPS allows to change the pension fund manager subject to certain limits.
Here we look at the returns generated by all the pension fund managers in above mentioned plans . We have sorted the tables on the basis of trailing returns ( point to point returns) given in the last five years to find the best pension fund manager.
Best performing NPS Fund Manager - Central Government Plan
SBI Pension Fund, the largest pension scheme for Central Government subscribers is the best performing scheme with 9.93% returns in the last five years. Other two schemes have also fared well by giving over 9% returns in the same time period. SBI Pension Fund- Central Government Plan invests around 10.10% in equities.
Government Subscribers w.e.f. April 1, 2019 have the option to select the Pension Funds and Investment Pattern in their Tier- I account. If the choice is not exercised by the Subscriber, NPS contributions would be invested in the existing default schemes of the three Pension Fund Managers - LIC Pension Fund Limited, SBI Pension Funds Pvt. Limited and UTI Retirement Solutions Limited in a predefined proportion.
Best performing NPS Fund Manager - State Government Plan
SBI Pension Fund managing the highest assets over ₹80,000 crore stood as the best performer with 10% returns in the last five years. The scheme invested around 9.6% in equities as on July 31.
Best performing Tier I Equity NPS Fund Manager (Scheme E)
HDFC Pension Fund, Kotak Pension Fund and UTI Retirement Solutions are the top three pension fund managers on the basis of the last five year returns in Tier 1 Scheme E or equity plan of NPS. The returns though might not look very lucrative due to the muted overall returns in equity markets. Here's how all the schemes performed.
Best performing Tier II Equity NPS Fund Manager
HDFC Pension Fund and Kotak Pension Fund have generated highest returns for subscribers in the three- and five-year periods. HDFC Pension Fund manages highest assets in the category worth ₹149 crore. See performance table below.
Tier II account in NPS is a voluntary Investment account which aims to provide a window of liquidity to meet financial contingencies and build savings through investments. A subscriber to NPS Tier II Account enjoys unlimited online withdrawals and can get the sum credited in bank account whenever needed.
The subscriber can choose a separate Scheme Preference for Tier II. She need not necessarily choose the same scheme as in Tier I.
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