Unlocking Retirement Prosperity: How NPS Remains Cutting-Edge

The main reason for NPS's popularity is the consistency of returns and cost-efficiency

- SHYAMSUNDAR BALIGA

The National Pension System (NPS) is one of the most cost-efficient retirement planning products that comes with a prudent risk management framework and close regulatory oversight. The NPS ensures a comfortable retirement by combining market-linked returns with disciplined savings and power of compounding. With growing awareness, the NPS has attracted a lot of interest and growth. As a result, its assets under management (AUM) has now crossed ₹10 trillion.

The most prominent reason for its increased awareness and popularity is the consistency in investment returns and cost-effectiveness. The NPS has consistently delivered superior returns compared to alternative products and inflation, with equity schemes generating approximately 12.8% per annum and debt schemes around 9% per annum over the last 10 years. This can be compared with current interest rates of EPF at 8.15%, PPF at 7.1%, and various small saving schemes ranging from 6.7% and 7.7%.

It is worth noting that NPS continues to evolve and improve through subscriber-friendly measures introduced by the Pension. Fund Regulatory and Development Authority (PFRDA).