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NPS posts over 13% annual returns in equity schemes:FM Sitharaman

India’s National Pension System (NPS) has emerged as one of the most efficient retirement planning tools globally, delivering over 13 per cent average annual returns in its equity schemes since inception, Finance Minister Nirmala Sitharaman said on Wednesday.Speaking at the NPS Diwas conference on “Inclusive Pensions, Innovative Solutions: Strengthening Retirement Security in India” organized by the Pension Fund Regulatory and Development Authority (PFRDA) in New Delhi, Sitharaman highlighted the robust performance of the system’s investment options.

The minister noted that, NPS schemes have consistently generated long-term wealth for subscribers. While equity investments have returned more than 13 per cent annually, corporate debt and government securities schemes have yielded around 9 per cent on average. “The schemes under NPS have generated attractive returns. The average annual returns since inception under the equity scheme have been over 13 per cent, and around 9 per cent for both Corporate Debt and Government Securities schemes,” she said.The finance minister underlined that these strong returns, coupled with NPS’s low-cost structure, portability, and flexibility, make it a cornerstone of retirement security in India. Introduced in 2004 by the NDA government, NPS marked a shift from a defined-benefit model to a defined-contribution framework, ensuring sustainability in pension planning.
“What began as a reform for government employees has now evolved into a universal retirement tool, accessible to all citizens, including the private sector and self-employed individuals. NPS transformed retirement planning from a government-sector privilege into a universal tool for financial security,” Sitharaman noted.
Globally recognized as one of the lowest-cost pension fund management systems, NPS allows subscribers to keep more of their contributions invested and compounding over time. Portability ensures that the same account remains active even after job changes, relocations, or transitions to self-employment.Subscribers can maintain their NPS account with a minimum annual contribution of just Rs1,000, without mandatory monthly payments, making it particularly relevant for informal and gig economy workers. To further enhance efficiency, the platform in 2024 upgraded its Direct Remittance (D-Remit) facility, allowing subscribers to receive same-day Net Asset Value (NAV) on contributions, eliminating the risk of losing out on potential gains due to processing delays.“As India moves with purpose toward Viksit Bharat @ 2047, every citizen can envision financial dignity in old age,” Sitharaman said. She added that a secure pension system not only ensures dignified aging but also eases financial pressure on working-age children while channeling long-term savings into nation-building.

(Business Correspondent)


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