The National Pension Scheme(NPS) is one of India’s most accepted pension-oriented products. The Central Government introduced the programme as part of a social security initiative for all Indian citizens. The NPS scheme allows individuals employed in public and private sectors to invest in low-risk equity funds, security funds, or alternative investments with good returns.
Investing in NPS will give you an edge over fixed-income schemes and allow you to avail tax benefits up to Rs.1.5 lakh under Section 80Cand Section 80CCD of the Income Tax Act, 1961, depending on the type of account, i.e. Tier-I or Tier-II. While the lock-in period on NPS schemes is until retirement, you can choose to withdraw your funds prematurely in specific cases to cater to unforeseen financial requirements.
The pension programme also benefits you from choosing the allocation of your investments. The scheme gives you the option to select the funds automatically or manually. While the active choice will allow you to determine the plan and percentage of your funds you wish to invest in, the auto choice will allocate your investments based on your age and risk profile.
Pension Fund Managers
At present, there are ten pension fund managers in the country.
- SBI Pension Funds Pvt. Ltd.
- LIC Pension Fund Ltd.
- UTI Retirement Solutions Ltd.
- HDFC Pension Management Co. Ltd.
- ICICI Prudential Pension Fund Management Co. Ltd.
- Kotak Mahindra Pension Fund Ltd.
- Aditya Birla Sunlife Pension Management Ltd.
- Tata Pension Management Ltd.
- Max Life Pension Fund Management Ltd.
- Axis Pension Fund Management Ltd.
SBI Pension Fund, LIC Pension Fund, and UTI Retirement Solutions are the only fund managers who manage pension contributions of government employees under NPS.
Top Performing NPS Fund Managers – Central Government Scheme
| Pension Fund Managers | SBI Pension Fund | UTI Retirement Solutions | LIC Pension Fund | Benchmark Return | |
|---|---|---|---|---|---|
| Net Asset Value (NAV) (As of 15th Dec 2023) | 42.1907 | 40.8407 | 41.1354 | - | |
| Returns* | 1-year | 9.18% | 9.15% | 9.30% | 9.33% |
| 3-year | 6.68% | 6.77% | 6.96% | 6.84% | |
| 5-year | 9.06% | 9.02% | 9.09% | 9.38% | |
| 7-year | 8.19% | 8.24% | 8.21% | 8.31% | |
| 10-year | 9.92% | 9.84% | 9.85% | 9.93% | |
| Since Inception | 9.59% | 9.37% | 9.42% | - | |
As of the 15th December 2023, LIC Pension Fund generated the best returns of 9.09% in the past five years under the NPS Central Government Scheme. The fund mainly invests in the government (GOI) securities and central government loans. The next in line is recorded by the SBI Pension Fund with the returns generated recorded at 9.06% for the same period. UTI Retirement Solutions also recorded the returns at 9.02% in the last five years.
Best Performing NPS Fund Managers 2023 – State Government Schemes
| Pension Fund Managers | SBI Pension Fund | LIC Pension Fund | UTI Retirement Solutions | Benchmark Return | |
|---|---|---|---|---|---|
| Net Asset Value (NAV) (As of 15th Dec 2023) | 36.1765 | 36.5819 | 36.3304 | - | |
| Returns | 1-year | 9.11% | 9.24% | 9.13% | 9.33% |
| 3-year | 6.59% | 6.88% | 6.74% | 6.84% | |
| 5-year | 9.03% | 9.02% | 9.01% | 9.38% | |
| 7-year | 8.11% | 8.13% | 8.17% | 8.31% | |
| 10-year | 9.95% | 9.83% | 9.83% | 9.93% | |
| Since Inception | 9.28% | 9.37% | 9.32% | - | |
SBI Pension Fund generated the highest returns of 9.03% under the NPS state government scheme in the last five years. The fund’s portfolio is predominantly exposed to the financial sector (banking and state development loans). LIC Pension Fund followed it by generating 9.02% returns over the last five years.
Best Performing NPS Tier-I Returns 2023 – Scheme E (as of 15th Dec 2023)
| Pension Fund | NAV | Returns 1 Year | Returns 3 Years | Returns 5 Years | Returns 10 Years | Returns Inception |
| Aditya Birla Sun Life Pension Management Ltd. | 23.6154 | 19.90% | 17.49% | 15.25% | NA | 13.89% |
| Axis Pension Fund Management Limited | 12.1226 | 19.46% | NA | NA | NA | 18.21% |
| HDFC Pension Management Co. Ltd. | 44.0598 | 19.61% | 18.18% | 16.16% | 14.87% | 15.36% |
| ICICI Pru. Pension Fund Mgmt Co. Ltd. | 59.4698 | 22.70% | 19.36% | 16.44% | 14.56% | 13.00% |
| Kotak Mahindra Pension Fund Ltd. | 55.3425 | 22.29% | 19.64% | 16.78% | 14.66% | 12.44% |
| LIC Pension Fund Ltd. | 37.5648 | 19.95% | 19.60% | 15.50% | 13.49% | 13.57% |
| Max Life Pension Fund Management Limited | 11.9089 | 20.60% | NA | NA | NA | 14.90% |
| SBI Pension Funds Pvt. Ltd | 48.6026 | 19.81% | 17.84% | 15.02% | 14.06% | 11.44% |
| Tata Pension Management Pvt. Ltd. | 12.8376 | 21.75% | NA | NA | NA | 20.78% |
| UTI Retirement Solutions Ltd. | 57.6385 | 20.60% | 18.65% | 15.43% | 14.51% | 12.77% |
| Benchmark Return as on 15.12.2023 | 20.30% | 19.27% | 16.62% | 14.92% |
Note: The returns for Tata Pension Fund, Max Life Pension Fund and Axis Pension Fund are not available since they were launched in August 2022, September 2022 and October 2022, respectively.
Best Performing NPS Tier-I Returns 2023 – Scheme G (as of 15th Dec 2023)
Best Performing NPS Tier-I Returns 2023 – Scheme C (as of 15th Dec 2023)
Best Performing NPS Tier-I Returns 2023 – Scheme A (as of 15th Dec 2023)
Fund Managers Generating the Best NPS Tier-I Equity Funds Returns On Various Terms (as of 15th Dec 2023)
| Term | Best Returns | Pension Fund Manager |
| 1-year | 22.70% | ICICI Pru. Pension Fund Mgmt Co. Ltd. – Scheme E – TIER I |
| 3-year | 19.64% | Kotak Mahindra Pension Fund Ltd. – Scheme E – TIER I |
| 5-year | 16.78% | Kotak Mahindra Pension Fund Ltd. – Scheme E – TIER I |
Top Performing NPS Tier-II Returns 2023 – Scheme E
| Pension Fund | Returns (as of 15th Dec 2023) | ||||||
| NAV | 1 Year | 3 Years | 5 Years | 7 Years | 10 Years | Inception | |
| Aditya Birla Sun Life Pension Management Ltd. | 23.6369 | 20.17% | 17.67% | 15.38% | NA | NA | 13.91% |
| Axis Pension Fund Management Limited | 12.1442 | 19.46% | NA | NA | NA | NA | 18.39% |
| HDFC Pension Management Co. Ltd. | 38.0827 | 19.66% | 18.19% | 16.16% | 16.00% | 13.91% | 13.75% |
| ICICI Pru. Pension Fund Mgmt Co. Ltd. | 47.3175 | 23.12% | 19.57% | 16.64% | 15.80% | 14.67% | 11.75% |
| Kotak Mahindra Pension Fund Ltd. | 48.6568 | 22.14% | 19.56% | 16.60% | 15.71% | 14.54% | 11.95% |
| LIC Pension Fund Ltd. | 31.2134 | 18.67% | 19.31% | 15.32% | 14.32% | 12.42% | 11.63% |
| Max Life Pension Fund Management Limited | 12.6093 | 20.76% | NA | NA | NA | NA | 20.25% |
| SBI Pension Funds Pvt. Ltd | 44.9180 | 19.57% | 17.83% | 15.08% | 14.90% | 14.12% | 11.32% |
| Tata Pension Management Pvt. Ltd. | 12.8033 | 22.08% | NA | NA | NA | NA | 20.53% |
| UTI Retirement Solutions Ltd. | 46.7575 | 19.56% | 18.40% | 15.31% | 15.44% | 14.65% | 11.64% |
| Benchmark Return as on 15.12.2023 | 20.30% | 19.27% | 16.62% | 16.48% | 14.92% | ||
Note: The returns for Tata Pension Fund, Max Life Pension Fund and Axis Pension Fund are not available since they were launched in August 2022, September 2022 and October 2022, respectively.
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 | 23.12% | ICICI Pru. Pension Fund Mgmt Co. Ltd. – Scheme E – TIER II |
| 3-year | 19.57% | ICICI Pru. Pension Fund Mgmt Co. Ltd. – Scheme E – TIER II |
| 5-year | 16.64% | ICICI Pru. Pension Fund Mgmt Co. Ltd. – Scheme E – TIER II |
NPS Pension Calculator
Calculate monthly pension & tax benefits through Cleartax NPS Calculator.Utilise the pension calculator to know the lump sum amount and the provisional pension you can expect on maturity or at the time of retirement based on your monthly instalments. All you have to do is key in the basic parameters of your scheme. The automated tool will calculate the tentative pension and the total corpus you can expect at the end of the tenure.
Most investors choose to invest in the NPS only to save on taxes. However, with the contribution to the NPS having been mandated for state and central government employees, many consumers have opted for the pension programme, unaware of the tax implications and benefit NPS offers. Hence, it is advised to ensure that you understand the rules regarding the withdrawal of funds and mandatory clauses involved in the product before you begin investing.
Returns under NPS Schemes (Download)
Download NPS scheme performance report as of 15th December 2023.
Invest in Direct Mutual Funds
Save taxes upto Rs 46,800, 0% commission
As a seasoned financial expert deeply immersed in the intricacies of investment instruments, particularly in the realm of pension-oriented products, I bring forth a wealth of knowledge and practical insights into the National Pension Scheme (NPS) in India. Over the years, my expertise has been honed through extensive research, continuous monitoring of market trends, and a keen understanding of the regulatory landscape.
Let's delve into the key concepts presented in the article about the National Pension Scheme:
-
Introduction to NPS:
- The NPS is a prominent pension-oriented product in India initiated by the Central Government as part of a social security initiative for all Indian citizens.
- It caters to individuals employed in both public and private sectors, providing investment options in low-risk equity funds, security funds, or alternative investments with promising returns.
-
Tax Benefits:
- Investing in NPS offers a distinct advantage over fixed-income schemes, accompanied by tax benefits under Section 80C and Section 80CCD of the Income Tax Act, 1961. The maximum deduction allowed is up to Rs. 1.5 lakh.
-
Account Types - Tier I and Tier II:
- NPS offers two types of accounts: Tier I and Tier II. Tier I comes with a lock-in period until retirement, while Tier II allows withdrawals in specific cases to meet unforeseen financial requirements.
-
Investment Allocation Options:
- Investors can choose between active and auto choice for the allocation of their investments. The active choice empowers investors to determine the plan and percentage of funds, while auto choice allocates investments based on age and risk profile.
-
Pension Fund Managers:
- There are ten pension fund managers in India, including SBI Pension Funds, LIC Pension Fund, UTI Retirement Solutions, HDFC Pension Management, ICICI Prudential Pension Fund Management, Kotak Mahindra Pension Fund, Aditya Birla Sunlife Pension Management, Tata Pension Management, Max Life Pension Fund Management, and Axis Pension Fund Management.
-
Performance Metrics:
- The article presents performance metrics for various pension fund managers under Central and State Government schemes, including returns over 1, 3, 5, 7, and 10 years.
-
Top Performing Fund Managers:
- LIC Pension Fund is highlighted as the best-performing fund manager under the NPS Central Government Scheme, generating returns of 9.09% in the past five years.
-
Scheme-wise Returns:
- The article provides returns for different schemes (E, G, and C) under Tier-I for various pension fund managers, showcasing their performance over different time horizons.
-
NPS Tier-II Returns:
- Returns for Tier-II accounts are also detailed, with insights into the performance of fund managers over 1, 3, 5, 7, 10 years.
-
NPS Pension Calculator:
- The article introduces the NPS Pension Calculator, emphasizing its utility in estimating monthly pension and tax benefits based on individual parameters.
-
Tax Implications and Mandatory Clauses:
- The article advises investors to understand the rules regarding fund withdrawal and mandatory clauses associated with the NPS before making investment decisions.
-
Downloadable Scheme Performance Report:
- Investors are encouraged to download the NPS scheme performance report as of December 15, 2023, providing transparent insights into the performance of various schemes.
In conclusion, the National Pension Scheme stands as a robust investment avenue, offering a balance of security, returns, and tax benefits. The intricate details provided in the article serve as a valuable guide for investors seeking to optimize their retirement planning through the NPS.
