NPS beats Provident Funds which delivers 9.33% average returns

In India 16 lakh central and state government employees have almost Rs 8,500 crore invested in the NPS((New Pension Scheme). This money is managed by three pension fund managers – SBI Pension Funds, LIC Pension Fund and UTI Retirement Solutions. Each of the three funds manages roughly one-third of the NPS corpus. 

NPS(New Pension Scheme) managers who are handling the pension funds of Central and state government employees have delivered average returns of 9.33% in the past one year, outperforming the state-run government provident fund (GPF), employees provident fund (EPF) and the public provident fund (PPF). 

The three-year annualised returns are also quite decent at 8.47%, though not as spectacular as in the past one year. Though three years is a very short time to judge long-term instruments such as pension funds, the impressive performance is likely to silence the criticism that NPS is not allocating enough to growthassets. Central and state government

NPS funds can invest a maximum of 15% in equities. Even in NPS for the general public, where investors can choose their own asset allocation, a maximum of 50% can be put in equities. The Pension Funds Regulatory and Development Authority has defended this conservative allocation saying that pension funds should not have a large exposure to risky assets.