How NPS has performed in the past 5 years?

Planning for your retirement? These returns from NPS may help you plan better

NPS returns based on investment styles

The National Pension Scheme (NPS) is one of the few financial products that help you build a nest egg for retirement. The scheme offers various funds that have varying exposure to equity, corporate debt and government securities. Based on your risk profile, you could limit the exposure to various components. Equity, for example, carries the most risk and can potentially generate the highest returns. One of the ways you can decide on which funds to invest in is by looking at their performance of various fund managers over the last 5 years.  

Fixed plans

If you are a central or state government employee, you can choose the plans offered specifically for them. Similarly, subscribers to Atal Pension Yojna and Swavalamban Scheme can only select from the plans available under these schemes. They cannot choose to actively decide how their monies should be invested in various fund types. 

The return for five such plans is provided below. One can choose the pension fund manager they like within the plan.

Central Government Plans

These plans allocate 8% to 12% of the investment into equity. The returns have been better than risk-free returns offered by banks. 

Funds LIC Pension Fund SBI Pension Fund UTI Retirement Solutions
NAV 28.44 29.31 28.36
6-month return (%) 7.86 8.00 7.82
1-year return (%) 13.07 13.20 12.79
3-year return (%) 9.56 9.59 9.70
5-year return (%) 10.01 10.32 10.19
Worth of monthly ₹5,000 contribution after 3 years (lakh) 2.05 2.05 2.05
Worth of monthly ₹5,000 contribution after 5 years (lakh) 3.77 3.78 3.78
Assets (Cr) 34,355 38,804 36,894


State Government Plans

Equity allocation for these plans ranges from 7% to 11%.

Funds LIC Pension Fund SBI Pension Fund UTI Retirement Solutions
NAV 25.38 25.17 25.25
6-month return (%) 7.85 8.05 7.85
1-year return (%) 12.96 13.22 12.80
3-year return (%) 9.51 9.57 9.59
5-year return (%) 10.08 10.38 10.19
Worth of monthly ₹5,000 contribution after 3 years (lakh) 2.05 2.05 2.05
Worth of monthly ₹5,000 contribution after 5 years (lakh) 3.77 3.78 3.77
Assets (Cr) 52,580 54,586 53,521

NPS Lite (Swavalamban) Plans

These plans invest 10% to 15% of the funds into equities.

Funds LIC Pension Fund SBI Pension Fund
NAV 18.74 18.70
6-month return (%) 8.35 8.09
1-year return (%) 13.70 13.33
3-year return (%) 9.58 9.69
5-year return (%) 10.14 10.48
Worth of monthly ₹5,000 contribution after 3 years (lakh) 2.05 2.05
Worth of monthly ₹5,000 contribution after 5 years (lakh) 3.78 3.79
Assets (Cr) 1,981 18,839


Atal Pension Yojna

Funds LIC Pension Fund SBI Pension Fund UTI Retirement Solutions
NAV 14.41 14.17 14.49
6-month return (%) 8.16 8.11 7.96
1-year return (%) 13.37 13.58 13.01
3-year return (%) 9.50 9.91 9.66
5-year return (%)      
Worth of monthly ₹5,000 contribution after 3 years (lakh) 2.05 2.06 2.05
Worth of monthly ₹5,000 contribution after 5 years (lakh)      
Assets (Cr) 2,322 2,410 2,328


Active Allocation

NPS members can choose one among eight pension fund managers available to them. Post that, they can choose to actively decide how much of their funds should be allocated to an asset type. Before we look at how various investor types have earned a return from NPS, let us look at how each fund manager has performed for a given fund type.

Tier I: Equity Plans

All of these plans have given better results than Nifty over 1-year, 3-year and 5-year periods.

Fund

NAV

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000[PN1] [KK2] contribution after 3 years ( lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Assets ( Cr.)

Birla Sun Life Pension Scheme

12.56

7.40

8.69

       

49

HDFC Pension Fund

22.90

10.28

11.33

14.86

11.57

2.17

4.04

2,181

ICICI Prudential Pension Fund

30.82

10.87

11.20

13.37

10.81

2.14

3.95

1,403

Kotak Pension Fund

28.27

10.18

9.51

13.14

10.74

2.12

3.92

281

LIC Pension Fund

19.87

8.47

9.78

12.12

9.94

2.09

3.83

568

Reliance Capital Pension Fund

28.14

8.63

10.91

12.23

10.01

2.10

3.84

103

SBI Pension Fund

26.55

9.54

11.36

13.71

11.06

2.15

3.98

2,482

UTI Retirement Solutions

30.81

8.95

10.64

13.80

11.59

2.14

3.98

387

 

Tier I: Government Bond Plans

All of these plans have given better results than average returns from investment in medium-term gilt funds over 1-year, 3-year and 5-year periods.

Fund

NAV

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000contribution after 3 years (lakh)

Worth of monthly 5,000contribution after 5 years (lakh)

Assets ( Cr.)

Birla Sun Life Pension Scheme

11.84

8.45

15.33

       

28

HDFC Pension Fund

17.63

8.49

15.65

9.44

10.38

2.06

3.79

1,768

ICICI Prudential Pension Fund

23.77

8.38

15.22

9.47

10.49

2.06

3.79

1,086

Kotak Pension Fund

23.67

8.61

15.70

9.50

10.47

2.06

3.80

240

LIC Pension Fund

19.00

10.21

17.73

11.22

11.40

2.11

3.92

579

Reliance Capital Pension Fund

23.08

8.43

14.95

9.42

10.47

2.05

3.79

105

SBI Pension Fund

25.67

8.34

15.13

9.54

10.61

2.05

3.80

2,902

UTI Retirement Solutions

23.01

8.30

14.62

8.80

10.03

2.04

3.74

336


Tier I: Corporate Debt Plans

All of these plans have given better results than average returns from investment in income funds over 1-year, 3-year and 5-year periods

Fund

NAV

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000 contribution after 3 years (lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Assets ( Cr.)

Birla Sun Life Pension Scheme

12.05

7.64

11.94

       

24

HDFC Pension Fund

17.72

7.71

12.12

8.92

9.91

2.03

3.74

1,232

ICICI Prudential Pension Fund

27.33

7.42

12.14

9.13

10.25

2.04

3.76

834

Kotak Pension Fund

26.94

7.38

11.01

8.72

9.79

2.02

3.72

173

LIC Pension Fund

17.56

7.28

11.61

8.35

9.64

2.02

3.70

353

Reliance Capital Pension Fund

24.44

7.13

11.34

8.81

9.79

2.02

3.72

65

SBI Pension Fund

27.32

7.23

12.06

8.87

9.80

2.03

3.73

1,572

UTI Retirement Solutions

24.54

7.27

11.18

8.46

9.54

2.02

3.70

219


Tier I: Alternative Investments
 

Fund

NAV

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000 contribution after 3 years (lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Assets ( Cr.)

Birla Sun Life Pension Scheme

11.53

3.72

7.66

       

0.65

HDFC Pension Fund

12.43

8.23

10.62

       

8

ICICI Prudential Pension Fund

12.08

7.50

9.96

       

3

Kotak Pension Fund

12.04

8.68

9.04

       

1

LIC Pension Fund

12.24

7.31

10.64

       

1

Reliance Capital Pension Fund

11.87

3.73

7.68

       

0.21

SBI Pension Fund

12.26

6.24

10.14

       

5

UTI Retirement Solutions

11.97

3.73

7.68

       

1


Tier II: Equity Plans

All of these plans have given better results than Nifty over 1-year, 3-year and 5-year periods.

Fund

NAV

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000 contribution after 3 years (lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Assets ( Cr.)

Birla Sun Life Pension Scheme

12.45

6.99

8.16

       

5

HDFC Pension Fund

19.81

10.32

11.23

15.00

11.43

2.17

4.05

78

ICICI Prudential Pension Fund

24.31

10.93

11.22

13.42

10.83

2.15

3.95

82

Kotak Pension Fund

24.96

10.16

9.76

13.17

10.74

2.12

3.92

20

LIC Pension Fund

16.58

8.24

10.21

12.06

8.87

2.08

3.81

15

Reliance Capital Pension Fund

24.06

8.50

10.72

12.28

10.01

2.10

3.85

8

SBI Pension Fund

24.48

9.54

11.35

13.72

11.08

2.15

3.98

104

UTI Retirement Solutions

25.11

8.75

11.22

13.94

11.72

2.15

3.99

24


Tier II: Government Bond Plans

All of these plans have given better results than average returns from investment in medium-term gilt funds over 1-year, 3-year and 5-year periods.

Fund

NAV

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000 contribution after 3 years (lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Assets ( Cr.)

Birla Sun Life Pension Scheme

11.43

8.56

15.27

       

3

HDFC Pension Fund

17.99

8.39

15.46

9.37

10.26

2.06

3.78

49

ICICI Prudential Pension Fund

22.76

8.24

15.05

9.40

10.47

2.05

3.79

64

Kotak Pension Fund

22.02

8.13

14.67

9.16

10.20

2.04

3.77

16

LIC Pension Fund

19.27

11.00

19.10

11.48

11.45

2.14

3.96

21

Reliance Capital Pension Fund

22.17

7.72

13.65

9.00

10.27

2.03

3.75

5

SBI Pension Fund

24.42

8.09

14.71

9.36

10.48

2.05

3.78

94

UTI Retirement Solutions

23.68

8.43

14.88

9.03

10.21

2.05

3.76

17


Tier II: Corporate Debt Plans

All of these plans have given better results than average returns from investment in income funds over 1-year, 3-year and 5-year period

Fund

NAV

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000 contribution after 3 years (lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Assets ( Cr.)

Birla Sun Life Pension Scheme

11.67

6.88

11.46

       

3

HDFC Pension Fund

16.71

7.38

11.83

9.01

9.14

2.03

3.73

41

ICICI Prudential Pension Fund

25.37

7.22

11.85

8.97

10.11

2.03

3.75

60

Kotak Pension Fund

23.16

7.25

11.36

8,73

9.59

2.02

3.71

11

LIC Pension Fund

16.40

7.19

11.36

8.19

9.06

2.01

3.68

10

Reliance Capital Pension Fund

22.53

5.99

10.17

8.40

9.45

2.01

3.69

4

SBI Pension Fund

24.99

7.27

11.97

8.81

9.76

2.03

3.73

68

UTI Retirement Solutions

23.48

7.01

11.19

8.43

9.50

2.02

3.70

13


Now, let us take a look at four sample investor types:

Aggressive investors

These investors are looking to generate as much return as possible, even if that entails a high risk. For our example, let us consider the below asset allocation:

Equity funds: 50%

Corporate debt: 30%

Gilt funds: 20%

The performance for such an investor over the last five years is shown below:

Tier I

Fund

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000 contribution after 3 years (lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Birla Sun Life Pension Scheme

7.68

           

10.99

       

HDFC Pension Fund

9.15

12.43

11.99

10.83

2.11

3.90

ICICI Prudential Pension Fund

9.34

12.29

11.32

10.58

2.09

3.86

Kotak Pension Fund

9.03

11.20

11.09

10.40

2.08

3.84

LIC Pension Fund

8.46

11.92

10.81

10.14

2.07

3.81

Reliance Capital Pension Fund

8.14

11.85

10.64

10.04

2.07

3.79

SBI Pension Fund

8.61

12.32

11.42

10.59

2.09

3.87

UTI Retirement Solutions

8.32

11.60

11.20

10.66

2.08

3.85


Tier II
 

Fund

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000 contribution after 3 years (lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Birla Sun Life Pension Scheme

7.27

           

10.57

       

HDFC Pension Fund

9.05

12.26

12.08

10.51

2.11

3.90

ICICI Prudential Pension Fund

9.28

12.18

11.28

10.54

2.09

3.86

Kotak Pension Fund

8.88

11.22

11.04

10.29

2.07

3.83

LIC Pension Fund

8.48

12.33

10.78

9.44

2.07

3.80

Reliance Capital Pension Fund

7.59

11.14

10.46

9.89

2.06

3.78

SBI Pension Fund

8.57

12.21

11.38

10.56

2.09

3.87

UTI Retirement Solutions

8.16

11.94

11.31

10.75

2.09

3.86

 

In the last few years, the market has rewarded the risk-takers richly. It is important to remember that NPS funds are locked in for 30 years, and investing in equity during the first few years could be good strategy. That said, the returns from equity have slowed down over the last six months. The equity rally that started 5 years back is letting up now. The investors should not expect to see similar high returns in the short-run. But look for accumulating good equity for long-term as the market is bound to cycle out of this slow down sooner than later. 

Balanced investors

These investors like to invest equally among all the available fund types. For our analysis we will ignore Alternative Assets as they have been introduced only a year back, and still enough data is not available on the returns. For our example, let us consider the below asset allocation:

Equity funds: 33.33%

Corporate debt: 33.33%

Gilt funds: 33.33%

The performance for such an investor over the last five years is shown below:

Tier I

Fund

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000 contribution after 3 years (lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Birla Sun Life Pension Scheme

7.83

           

11.99

       

HDFC Pension Fund

8.83

13.03

11.07

10.62

2.09

3.86

ICICI Prudential Pension Fund

8.89

12.85

10.66

10.52

2.08

3.83

Kotak Pension Fund

8.72

12.07

10.45

10.33

2.07

3.81

LIC Pension Fund

8.65

13.04

10.56

10.33

2.07

3.82

Reliance Capital Pension Fund

8.06

12.40

10.15

10.09

2.06

3.78

SBI Pension Fund

8.37

12.85

10.71

10.49

2.08

3.84

UTI Retirement Solutions

8.17

12.15

10.35

10.39

2.07

3.81

 

Tier II
 

Fund

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000 contribution after 3 years (lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Birla Sun Life Pension Scheme

7.48

           

11.63

       

HDFC Pension Fund

8.70

12.84

11.13

10.28

2.09

3.85

ICICI Prudential Pension Fund

8.80

12.71

10.60

10.47

2.08

3.83

Kotak Pension Fund

8.51

11.93

10.35

10.18

2.06

3.80

LIC Pension Fund

8.81

13.56

10.58

9.79

2.08

3.82

Reliance Capital Pension Fund

7.40

11.51

9.89

9.91

2.05

3.76

SBI Pension Fund

8.30

12.68

10.63

10.44

2.08

3.83

UTI Retirement Solutions

8.06

12.43

10.47

10.48

2.07

3.82

 

A balanced strategy is a good way to limit risk while still allowing enough opportunity to earn high returns. The investors who took this approach may not have earned as much as the aggressive investors – but have still managed a two-digit return over the last 5-year period. While this is a safe option, you should look to invest in lifecycle funds in case you find it difficult to decide how to allocate your funds. Lifecycle funds invest in equity at the start of your investment and slowly move the investments out of equity as you grow old.

Conservative investors

A conservative investor may choose to invest as little as 20% in equity funds, instead choosing much safer government debt. The asset allocation may look like this:

Equity funds: 20%

Corporate debt: 30%

Gilt funds: 50%

The performance for such an investor over the last five years is shown below:

Tier I
 

Fund

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000 contribution after 3 years (lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Birla Sun Life Pension Scheme

7.97

           

12.66

       

HDFC Pension Fund

8.87

13.65

10.96

10.64

2.09

3.86

ICICI Prudential Pension Fund

8.94

13.40

10.57

10.54

2.08

3.83

Kotak Pension Fund

8.84

12.91

10.44

10.42

2.07

3.82

LIC Pension Fund

9.10

14.12

10.92

10.61

2.09

3.85

Reliance Capital Pension Fund

8.23

13.02

10.14

10.20

2.06

3.79

SBI Pension Fund

8.48

13.39

10.66

10.58

2.08

3.84

UTI Retirement Solutions

8.29

12.74

10.23

10.40

2.07

3.80


Tier II
 

Fund

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000 contribution after 3 years (lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Birla Sun Life Pension Scheme

7.75     

12.38

       

HDFC Pension Fund

8.77

13.47

10.99

10.39

2.09

3.85

ICICI Prudential Pension Fund

8.84

13.26

10.52

10.51

2.08

3.83

Kotak Pension Fund

8.56

12.54

10.28

10.24

2.06

3.80

LIC Pension Fund

9.41

14.89

11.00

10.20

2.10

3.86

Reliance Capital Pension Fund

7.61

12.08

9.86

10.03

2.05

3.77

SBI Pension Fund

8.36

13.15

10.56

10.52

2.08

3.83

UTI Retirement Solutions

8.24

13.04

10.38

10.52

2.07

3.82


Conservative investors have not taken as much hit from the slowdown in equity markets as the aggressive investors. They have managed to earn a steady return over the last few years, and their long-term returns have continued to be in double digit. This kind of allocation is good for investors who are within a few years of maturity and should not be taking any undue risk.

Ultra-safe investors

An ultra-safe investor would like to reduce the risk as much as possible. Therefore, the asset allocation to equity funds would be the lowest – i.e. none at all. The would invest heavily in government debt. The asset allocation may look like this:

Corporate debt: 40%

Gilt funds: 60%

The performance for such an investor over the last five years is shown below:

Tier I

Fund

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000 contribution after 3 years (lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Birla Sun Life Pension Scheme

8.13

           

13.97

       

HDFC Pension Fund

8.18

14.24

9.23

10.19

2.05

3.77

ICICI Prudential Pension Fund

8.00

13.99

9.33

10.39

2.05

3.78

Kotak Pension Fund

8.12

13.82

9.19

10.20

2.04

3.77

LIC Pension Fund

9.04

15.28

10.07

10.70

2.07

3.83

Reliance Capital Pension Fund

7.91

13.51

9.18

10.20

2.04

3.76

SBI Pension Fund

7.90

13.90

9.27

10.29

2.04

3.77

UTI Retirement Solutions

7.89

13.24

8.66

9.83

2.03

3.72


Tier II
 

Fund

6-month return (%)

1-year return (%)

3-year return (%)

5-year return (%)

Worth of monthly 5,000 contribution after 3 years (lakh)

Worth of monthly 5,000 contribution after 5 years (lakh)

Birla Sun Life Pension Scheme

7.89     

13.75

       

HDFC Pension Fund

7.99

14.01

9.23

9.81

2.05

3.76

ICICI Prudential Pension Fund

7.83

13.77

9.23

10.33

2.04

3.77

Kotak Pension Fund

7.78

13.35

8.99

9.96

2.03

3.75

LIC Pension Fund

9.48

16.00

10.16

10.49

2.09

3.85

Reliance Capital Pension Fund

7.03

12.26

8.76

9.94

2.02

3.73

SBI Pension Fund

7.76

13.61

9.14

10.19

2.04

3.76

UTI Retirement Solutions

7.86

13.40

8.79

9.93

2.04

3.74


Unsurprisingly, these investors have earned the least interest of all. This is still better than the risk-free return they could earn. This allocation makes sense only if you want to avoid all risk and make sure your investment stays safe. This kind of allocation works best if your portfolio other than NPS is heavily invested in equity and therefore carries higher risk. In such a scenario, you could use this as way to balance your portfolio. Remember that 100% debt portfolio may not even beat inflation in long run, and such an allocation is only suited in very special cases. 
 

Related Article

Personal Finance News

How to go about getting deemed conveyance for your society

How to go about getting deemed conveyance for your society

 

Most Shared

Poll

What kind of gift would you like to gift your sibling this Raksha Bandhan?

A. Systematic Investment Plans
0%
B. Health Insurance
50%
C. Gold/Gold ETFs
50%
D. Others
0%