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The performance review of fund managers for 2010-11 by the Pension Fund Regulatory and Development Authority has revealed that NPS for private citizens has managed to give higher returns than NPS for government employees.
In a year when Employees’ Provident Fund gave a 9.5 per cent return and an over 8 per cent inflation rate ate into much of people’s income, the New Pension Scheme gave a mixed bag of results. Rising interest rates and volatile stock markets have impacted its returns in 2010-11 but, since inception, the NPS has managed to do better.
Central government employees in NPS earned a return of 8.05 per cent to 8.45 per cent, much below the weighted average of 9.7 per cent in 2009-10. While UTI gave the highest return of 8.45 per cent, SBI gave the lowest return of 8.05 per cent. However, returns for state government employees in NPS was much higher, which ranged between 11.34 per cent and 9.88 per cent.
“It is about timing your investments as well as exposure to instruments,” said a PFRDA official. Central government employees who joined the service after 2004 are mandated to be part of NPS, which allows up to 15 per cent of the total corpus to be invested in equities, while the rest in corporate debt and government securities.
Private citizens, who were allowed to join the scheme from May 2009 can invest 50 per cent of their portfolio in equities and the rest in government securities and corporate bonds via one of the six fund managers — UTI Retirement Solutions, SBI, ICICI Prudential Life Insurance, Reliance Capital, IDFC AMC and Kotak Mahindra AMC.
