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The National Pension Scheme (NPS) is one of the most accepted pension-oriented products in the country. The programme was introduced by the Central Government as part of a social security initiative for all Indian citizens. The NPS scheme allows individuals employed in the public and private sectors to invest in low-risk equity funds, security funds, or alternative investments with good returns.

Investing in this pension programme will not only give you an edge over other fixed income schemes but will also allow you to avail tax benefits up to Rs 2 lakh under Section 80C and 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 gives you the benefit of allocating your investments. The scheme gives you the option to choose the funds either automatically or manually. While the active choice will allow you to determine the scheme and percentage of your funds you wish to invest in, the auto choice will allocate your investments based on the risk assessment and your profile.

1.Pension Fund Managers

At present, there are 8 pension fund managers in the country.

    • Aditya Birla Sun Life Pension Management Limited.
    • HDFC Pension Management Company Limited.
    • UTI Retirement Solutions Limited.
    • SBI Pension Funds Private Limited.
    • ICICI Prudential Pension Funds Management Company Limited.
    • Reliance Pension Fund.
    • Kotak Mahindra Pension Fund Limited.
    • LIC Pension Fund.

SBI Pension Fund, LIC Pension Fund, and UTI Retirement Solutions are the only fund managers who manage pension contributions of government employees under NPS.

2.Top Performing NPS Fund Managers – Central Government Scheme

 

Pension Fund Managers SBI Pension Fund UTI Retirement Solutions LIC Pension Fund
Net Asset Value (NAV) 29.1853 28.3644 28.2369
Returns* 6-month 7.58% 7.36% 7.37%
1-year 12.64% 12.19% 12.45%
3-year 9.48% 9.56% 9.42%
5-year 10.39% 10.25% 10.08%

As of May 2019, SBI Pension Fund generated the best returns of 10.39% in the past five years under the NPS central government scheme. The fund mainly invests in the banking finance sector, government sector, and financial institutions.

The next in line is recorded by the UTI Retirement Solutions with the returns generated recorded at 10.25% for the same period. LIC Pension Fund, on the other hand, recorded the returns at 10.08% in the last five years.

3.Best Performing NPS Fund Managers 2019 – State Government Schemes

 

Pension Fund Managers SBI Pension Fund UTI Retirement Solutions LIC Pension Fund
Net Asset Value (NAV) 25.0669 25.1393 25.3053
Returns* 6-month 7.64% 7.40% 7.35%
1-year 12.68% 12.20% 12.34%
3-year 9.45% 9.46% 9.36%
5-year 10.45% 10.26% 10.14%

SBI Pension Fund generates the highest returns of 10.45% under the NPS state government scheme in the last five years. The fund manager’s portfolio is predominantly exposed to the financial sector. The Assets Under Management is also the largest in the lot and is recorded at Rs 57,474.92 crore as of May 2019.

4.Best Performing NPS Tier-I Returns 2019 – Scheme E

 

Pension Fund Managers Returns*
6-month 1-year 3-year 5-year
HDFC Pension Fund 9.16% 9.56% 14.72% 11.90%
UTI Retirement Solutions 7.71% 8.77% 13.50% 11.85%
SBI Pension Fund 8.26% 9.73% 13.49% 11.38%
ICICI Pension Fund 9.56% 9.30% 13.11% 11.12%
Kotak Mahindra Pension Fund 9.30% 9.28% 13.00% 11.12%
Reliance Pension Fund 7.51% 9.15% 12.05% 10.32%
LIC Pension Fund 7.07% 8.13% 11.86% 10.22%
Aditya Birla Pension Fund 6.22% 7.12% NA NA

5.Fund Managers generating the best NPS Tier-I Equity Funds returns on various terms:

 

Term Best Returns Pension Fund Manager
6-month 9.56% ICICI Pension Fund
1-year 9.73% SBI Pension Fund
3-year 13.50% UTI Retirement Solutions
5-year 11.90% HDFC Pension Fund

6.Top Performing NPS Tier-II Returns 2019 – Scheme E

 

Pension Fund Managers Returns*
6-month 1-year 3-year 5-year
HDFC Pension Fund 9.20% 9.47% 14.87% 11.50%
UTI Retirement Solutions 7.54% 9.39% 13.66% 11.96%
SBI Pension Fund 8.24% 9.71% 13.50% 11.39%
ICICI Pension Fund 9.64% 9.32% 13.16% 11.14%
Kotak Mahindra Pension Fund 9.29% 9.54% 13.03% 11.12%
Reliance Pension Fund 7.34% 8.94% 12.08% 10.32%
LIC Pension Fund 6.83% 8.51% 11.74% 8.97%
Aditya Birla Pension Fund 5.81% 6.61% NA NA

7.Fund Managers generating the best NPS Tier-II Equity Funds returns on different tenures:

 

Term Best Returns Pension Fund Manager
6-month 9.29% Kotak Mahindra Pension Fund
1-year 9.71% SBI Pension Fund
3-year 14.87% HDFC Pension Fund
5-year 11.96% UTI Retirement Solutions

8.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 along with 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. 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.

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