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- Best Pension Fund Manager for NPS in India
- NPS Tier I: Scheme-wise Fund Manager Performance
- NPS Tier II: Scheme-wise Fund Manager Performance
- NPS Fund Managers and Their Duties
- How to Choose the Best NPS Fund Manager?
- Factors to Consider While Selecting the Best NPS Fund Manager
- Frequently Asked Questions
National Pension Scheme (NPS) is an initiative by the Central Government of India for employees in private, public, and unorganised sectors. This is a voluntary scheme where any investor can choose to invest at regular intervals. Investors are allowed to withdraw a certain amount as a lump sum on retirement, and the rest is received as a monthly pension. To invest in NPS, you must first select the Best NPS Fund Manager that aligns with your investment horizon, goals, and risk level.
Best Pension Fund Manager for NPS in India
The best NPS Fund Managers for the government sector and non-government sector in India are –
- SBI Pension Funds Pvt. Ltd. (Government sector and Non-government sector)
- LIC Pension Fund Ltd. (Government sector and Non-government sector)
- UTI Retirement Solutions Ltd. (Government sector and Non-government sector)
- HDFC Pension Management Co. Ltd. (Non-government sector)
- ICICI Prudential Pension Fund Management Co. Ltd. (Non-government sector)
- Kotak Mahindra Pension Fund Ltd. (Non-government sector)
- Aditya Birla Sun Life Pension Management Ltd. (Non-government sector)
- Tata Pension Management Ltd. (Non-government sector)
- Max Life Pension Fund Management Ltd. (Non-government sector)
- Axis Pension Fund Management Ltd. (Non-government sector)
NPS Tier I: Scheme-wise Fund Manager Performance
| Scheme A – Tier I | Scheme E – Tier I | Scheme C – Tier I | Scheme G – Tier I | |||||
| 3Yr | 5Yr | 3Yr | 5Yr | 3Yr | 5Yr | 3Yr | 5Yr | |
| SBI PF | 8.16% | 8.56% | 16.07% | 10.34% | 6.49% | 8.11% | 5.20% | 8.32% |
| LIC PF | 6.48% | 7.82% | 17.86% | 10.30% | 6.68% | 8.10% | 5.37% | 9.21% |
| UTI RSL | 4.75% | 5.63% | 17.07% | 10.54% | 6.20% | 7.63% | 5.13% | 8.18% |
| ICICI PF | 4.46% | 6.50% | 16.84% | 10.84% | 6.57% | 8.01% | 5.20% | 8.29% |
| Kotak PF | 3.95% | 5.98% | 17.03% | 10.92% | 6.02% | 7.28% | 5.28% | 8.50% |
| HDFC PF | 7.04% | 8.39% | 16.78% | 11.52% | 6.96% | 8.41% | 5.34% | 8.55% |
| Birla PF | 4.77% | 5.64% | 15.80% | 10.53% | 6.52% | 8.20% | 5.46% | 8.47% |
| Tata PF | NA | NA | NA | NA | NA | NA | NA | NA |
| Max Life PF | NA | NA | NA | NA | NA | NA | NA | NA |
| Axis PF | NA | NA | NA | NA | NA | NA | NA | NA |
Note: NPS scheme returns as on 28 February 2023
NPS Tier II: Scheme-wise Fund Manager Performance
| Scheme E – Tier II | Scheme C – Tier II | Scheme G – Tier II | Scheme Tax Saver – Tier II | |||||
| 3Yr | 5Yr | 3Yr | 5Yr | 3Yr | 5Yr | 6M | 1Yr | |
| SBI PF | 16.26% | 10.43% | 6.02% | 7.66% | 5.06% | 8.17% | 1.88% | 3.62% |
| LIC PF | 17.84% | 10.35% | 7.42% | 8.39% | 5.29% | 9.63% | 2.83% | 6.28% |
| UTI RSL | 17.12% | 10.74% | 6.07% | 7.66% | 5.05% | 8.21% | 2.79% | 5.74% |
| ICICI PF | 17.00% | 10.98% | 6.56% | 7.91% | 5.25% | 8.29% | 1.60% | 3.75% |
| Kotak PF | 16.71% | 10.80% | 6.04% | 7.67% | 5.21% | 8.17% | 1.62% | 4.24% |
| HDFC PF | 16.68% | 11.43% | 6.85% | 8.21% | 5.11% | 8.35% | 3.17% | 5.34% |
| Birla PF | 16.02% | 10.51% | 6.54% | 8.06% | 5.38% | 8.46% | 2.50% | 5.92% |
| Tata PF | NA | NA | NA | NA | NA | NA | 3.05% | NA |
| Max Life PF | NA | NA | NA | NA | NA | NA | NA | NA |
| Axis PF | NA | NA | NA | NA | NA | NA | NA | NA |
Note: NPS scheme returns as on 28 February 2023
NPS Fund Managers and Their Duties
The NPS fund manager is a finance professional similar to a mutual fund manager. The objective of the fund manager is to invest pension funds gathered from various investors in different assets. They divide them into three asset classes – stocks, corporate bonds, and government securities. In other words, it manages the pension funds that every investor allocates judiciously. Also, they conduct reviews on the investments to see if they are operating effectively. Furthermore, the fund manager is paid a fee in exchange for their services. This fee is determined by the average number of assets managed by them.
The following are the duties of the NPS fund manager –
- It pools money from investors to invest in various asset classes that aim to generate maximum returns at suitable risk.
- They must invest the pool of funds according to the Investment Policy and Authority’s Regulations.
- Evaluating the performance of investments regularly to ensure they are generating optimal returns.
How to Choose the Best NPS Fund Manager?
While selecting the best pension fund manager for NPS, you first need to choose between the two scheme options – auto choice or active choice. If you opt for active choice, you must select the fund manager to work for the asset allocation strategy.
It is essential to understand the past track record of the asset class where you prefer to have higher exposure. Based on this, you can assess the performance of the NPS fund manager and the track record of the fund they have been managing. Simply put, you can analyze the consistency of returns, rolling returns, Sharpe ratio, and other fund factors that the fund manager manages.
For instance, if you prefer equity investment, you can consider choosing a fund manager who consistently outperformed in equity funds. Similarly, choose a fund manager with a better track record in debt funds if you want to opt for debt exposure.
Additionally, you must also select the fund manager based on your risk tolerance level. The NPS has the following categories based on the risk tolerance level of the investor and also how the percentage of assets is allocated –
| Investor Risk Level | Equity (E) | Corporate Bonds (C) | Government Securities(G) |
| Aggressive | 75% | 10% | 15% |
| Moderate | 50% | 25% | 25% |
| Conservative | 25% | 20% | 55% |
| Ultra Safe | 5% | 15% | 80% |
This categorization allows you to allocate your funds to equities, corporate bonds, and government securities. Also, you must review your portfolio regularly to understand how the fund is performing. Moreover, you must remember that a default NPS fund manager will be assigned if you do not choose a fund manager.
Factors to Consider While Selecting the Best NPS Fund Manager
The following are the factors to consider while selecting the best pension fund manager for NPS –
- Investment Objective: The criteria for selecting NPS is similar to a mutual fund. The NPS is specially designed for retirement planning. Hence, the pension fund manager must align with your investment objective.
- Investment Horizon: You must understand your investment duration while selecting the asset allocation for the NPS scheme. In other words, how closer you are to your retirement will dictate the ratio of fixed income vs equity. Based on this, you can assess the fund manager of the preferred asset class.
- Risk Tolerance: You must assess your risk appetite, which will help you select the desired category of asset allocation. Thus, this will help select the fund manager that can closely meet the expected risk-reward preference.
- Past Performance: You can also check the historical performance of the fund manager who has been managing the fund for years. This will help in the decision-making process.
Additionally, per the NPS rules, you can select different fund managers for Tier I and Tier II accounts. However, you cannot choose different fund managers for different asset classes within the same Tier. For instance, if you choose LIC Pension Fund, the corporate bond, equity, and government securities, the pension fund manager will be from LIC only.
Frequently Asked Questions
National Pension Scheme is a voluntary retirement scheme, initiated by the central government for public, private, and unorganised sector employees. It encourages you to start savings much before retirement. Investors can withdraw a certain percentage of accumulated corpus on retirement, and the rest is received as a monthly annuity post-retirement.
The four types of funds available in NPS are: Asset Class E investing in equities, Asset Class C investing in corporate bonds, Asset Class G investing in government bonds, and Asset Class A investing in alternative assets like REITs/InvITs
Investments in NPS qualify for tax exemption up to INR 150,000 under Section 80C of the Income Tax Act, 1961. Furthermore, an additional investment of INR 50,000 qualifies for tax exemption under Section 80CCD. However, only investment in Tier I qualifies for tax exemption.
Yes, you can change the fund manager in NPS only once in a financial year. This can be done online or through the point of presence.
No, you can only have one fund manager in NPS. However, you can have different fund managers for Tier I and Tier II accounts.
There are ten fund managers in NPS. You can select the Best NPS fund manager that aligns with your investment duration, goals and risk tolerance level.
To pick the best fund manager, you need to first choose between auto choice or active choice. Next, look at the track record of the fund manager over the years. Finally, based on your risk tolerance levels, pick a suitable fund manager.
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