National Pension System Returns: Over 12% in NPS equity schemes in 12 years!

The NPS equity schemes have recorded more than 12 percent returns over a period of 12 years

National Pension System
Along with tax benefits every financial year from NPS, the investors get a pension during their retirement years.

The NPS equity schemes have recorded more than 12 percent returns over a period of 12 years. The returns in government securities and corporate bonds were around 9.9 percent and 9.59 percent during the same period, according to PFRDA Chairman Supratim Bandyopadhyay.

The Pension Fund Regulatory and Development Authority (PFRDA) chairman on Monday (December 6, 2021) said that NPS has generated good returns for the subscribers over the last 12 years. He also suggested that one must start early to reap the benefits of the product, which is very flexible in nature.

“Over a period of 12 years, the returns under equity schemes are more than 12 per cent, and in government securities, it was close to 9.9 per cent, and in corporate bonds, despite some credit events that we have seen, we have seen a CAGR of more than 9.59 per cent. Fortunately, our pension fund assets were, to a great extent, protected from post-credit events,” news agency PTI quoted the PFRDA chairman as saying at CII Insurance & Pensions Summit on ‘Indian Insurance Sector – Riding the Wave of Change’.

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“Currently, we are sitting on a total corpus of about Rs 6.85 trillion. The returns have been quite good,” Bandyopadhyay added.

The PFRDA Chairman also said that NPS gives a lot of flexibility, but to reap big benefits from the pension scheme, a person should start investing in the scheme as early as possible.

“There is flexibility in the sense that just for keeping an account running, you have to pay only Rs 1,000. There is no fixed contribution, and you can contribute up to whatever level, obviously under the PMLA ( Prevention of Money Laundering Act rules) and supported by all your known sources of income,” Bandhopadhyay said.

Currently, PFRDA provides two flagship pension schemes– NPS and APY. The National Pension System (NPS) caters to the organised sector employees, including the government and corporate sector. The Atal Pension Yojana (APY) targets unorganised sector workers.

Investment in NPS is also eligible for several tax benefits.

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