NPS Returns: Government employees have earned 9.33% returns on their National Pension System (NPS) deposits till now. In FY 2021-2022, the returns under NPS for Government employees were 6.91%. These returns are compounded annual growth rate of corpus invested in various asset classes such as Government securities, equity market etc, according to Dr Bhagwat Karad, the Minister of State in the Ministry of Finance.
“For the financial year 2021-22, the returns under NPS for Government employees have been 6.91%. NPS returns in respect of Government employees since inception are 9.33%. These returns are compounded annual growth rate of corpus invested in various asset classes viz. Government securities, Corporate debt instruments, Money market instruments and equity market,” Dr Karad said in a written reply to a query in the Parliament today.
The minister further said that NPS returns for FY 2021-2022 were better than most debt instruments.
NPS returns are market determined and annually evaluated by Pension Fund Regulatory and Development Authority (PFRDA). On the basis of returns, fund allocation is done amongst the three fund managers by PFRDA.
PFRDA frames the investment guidelines of NPS while the pension fund managers registered with PFRDA make investments under NPS in various asset classes i.e. Govemment securities, Corporate debt instruments, Money market instruments, Equity market etc., as per the investment guidelines and the amendments thereto issued by PFRDA.
The overall benefits under NPS depend on the accumulated corpus of the subscriber at the time of Exit.
“To protect the interest of the subscribers, the Government in20l9, enhanced the Government’s contribution from the earlier 10Yo of Pay + DA to 74o/o of Pay + DA, freedom of choice for selection of Pension Funds and pattern of investment to subscribers, payment of compensation for non-deposit or delayed deposit of NPS contributions for any period during 2004-2012, tax exemption under Section 80C of the Income Tax Act, 1961, and increase in tax exemption limit for lump sum withdrawal on exit from earlier 40Yo to 60% of the amount due, making the entire withdrawal exempt from income tax,” the minister said.