Best Pension Fund Managers for NPS

Quick Details About Pension Fund Managers

This table gives a quick overview of the functionality of pension fund managers:

What Is a Pension Fund Manager in NPS?

A Pension Fund Manager (PFM) is an entity registered with the Pension Fund Regulatory and Development Authority (PFRDA) that manages investments under the National Pension System (NPS) in line with prescribed investment guidelines.

Under NPS, subscribers can choose a pension fund manager for both Tier I and Tier II accounts. The selected fund manager invests contributions across different asset classes, including:

• Equity (E)
• Corporate Bonds (C)
• Government Securities (G)
• Alternative Investment Funds (A)

The primary objective of a pension fund manager is to build long-term retirement wealth while maintaining an appropriate balance between returns and risk.

List of NPS Pension Fund Managers in India

India currently has 11 PFRDA-registered Pension Fund Managers handling subscriber assets across Tier I and Tier II accounts.

1. Public Sector Pension Fund Managers

   Public sector pension fund managers like SBI Pension Funds, LIC Pension Fund, and UTI Retirement Solutions are designated as the default managers for Central and State Government employee contributions. They manage a significant share of total Assets Under Management (AUM) and have established track records due to their long-standing presence in the NPS framework.

2. Private Sector Pension Fund Managers

   Private sector pension fund managers primarily operate in the All-Citizen (Retail) and Corporate NPS segments. HDFC Pension Management holds a leading position in terms of market share among private players, followed by ICICI Prudential and Kotak Mahindra. Other participants, such as Tata, Max Life, Axis, and DSP, provide diversified investment approaches with a focus on specialised strategies and portfolio management.

How NPS Schemes Performed Over the Last Year?

Note: Short-term returns over a one-year period may be influenced by market fluctuations and should not be relied upon as the sole basis for long-term retirement planning decisions.

Best NPS Fund Manager by Scheme

1. Best NPS Fund Manager for Equity: Scheme E

   Scheme E allocates up to 75% of its funds to large-cap stocks listed on the BSE and NSE. Over longer investment periods, such as 7 and 10 years, ICICI Prudential and HDFC Pension Management have demonstrated strong wealth creation under this scheme, with annualised returns typically ranging between 12.8% and 15.0%.

   Pension Fund Manager	NAV (₹)	1Y Return	3Y Return	5Y Return	7Y Return	10Y Return
   ICICI Prudential Pension Fund	75.40	4.37%	12.61%	11.65%	15.00%	12.78%
   HDFC Pension Management	54.92	3.58%	11.66%	10.74%	14.48%	12.95%
   Kotak Mahindra Pension Fund	68.66	1.72%	11.93%	11.45%	14.77%	12.67%
   UTI Pension Fund	72.66	1.39%	12.20%	11.03%	14.48%	12.47%
   Aditya Birla Sun Life Pension	29.27	4.60%	11.20%	10.67%	13.97%	N/A
   LIC Pension Fund	45.35	1.84%	10.56%	10.39%	13.91%	11.64%
   SBI Pension Funds	57.42	3.20%	9.61%	9.74%	13.01%	11.53%
   Tata Pension Management	16.32	4.62%	13.32%	N/A	N/A	N/A
   Axis Pension Fund	14.51	-0.19%	10.00%	N/A	N/A	N/A
   DSP Pension Fund	12.44	-4.99%	N/A	N/A	N/A	N/A
   NPS Benchmark Index	-	3.64%	12.07%	11.18%	14.82%	13.08%

2. Best NPS Fund Manager for Corporate Bonds: Scheme C

   Scheme C focuses on investments in corporate debt instruments, including bonds, debentures, and infrastructure securities. Over a 10-year horizon, HDFC Pension Management and ICICI Prudential have shown consistent performance in this category, while Kotak Mahindra and UTI have delivered relatively strong returns over shorter periods, such as one year.

   Pension Fund Manager	NAV (₹)	1Y Return	3Y Return	5Y Return	7Y Return	10Y Return
   HDFC Pension Management	30.98	5.83%	8.16%	7.04%	7.81%	8.01%
   ICICI Prudential Pension Fund	46.61	5.79%	7.95%	6.82%	7.41%	7.77%
   SBI Pension Funds	46.85	5.91%	8.04%	6.80%	7.52%	7.76%
   Kotak Mahindra Pension Fund	44.84	6.14%	8.05%	6.86%	7.27%	7.40%
   UTI Pension Fund	41.51	6.13%	8.04%	6.79%	7.48%	7.51%
   LIC Pension Fund	29.92	5.45%	7.65%	6.60%	7.39%	7.56%
   Aditya Birla Sun Life Pension	20.67	5.46%	7.82%	6.73%	7.50%	N/A
   Axis Pension Fund	13.27	5.77%	7.83%	N/A	N/A	N/A
   DSP Pension Fund	12.22	5.90%	N/A	N/A	N/A	N/A
   Tata Pension Management	13.24	5.34%	7.88%	N/A	N/A	N/A
   NPS Benchmark Index	-	5.66%	7.56%	6.62%	7.77%	7.79%

3. Best NPS Fund Manager for Government Bonds: Scheme G

   Scheme G invests entirely in Central and State Government securities (G-Secs), making it a relatively stable and low-risk option. Over a 10-year period, LIC Pension Fund and SBI Pension Funds have demonstrated strong long-term performance, benefiting from their exposure to sovereign securities and effective management of interest rate cycles.

   Pension Fund Manager	NAV (₹)	1Y Return	3Y Return	5Y Return	7Y Return	10Y Return
   LIC Pension Fund	31.79	4.69%	7.47%	6.62%	6.86%	7.89%
   SBI Pension Funds	42.57	4.68%	7.47%	6.56%	6.81%	7.35%
   HDFC Pension Management	29.12	4.27%	7.07%	6.28%	6.73%	7.23%
   ICICI Prudential Pension Fund	39.11	4.61%	7.25%	6.34%	6.65%	7.19%
   UTI Pension Fund	38.09	4.76%	7.53%	6.74%	6.78%	7.15%
   Kotak Mahindra Pension Fund	38.67	4.20%	6.86%	6.26%	6.56%	7.13%
   Aditya Birla Sun Life Pension	19.78	4.59%	7.49%	6.65%	6.94%	N/A
   Axis Pension Fund	13.07	4.57%	7.14%	N/A	N/A	N/A
   Tata Pension Management	13.14	4.10%	6.92%	N/A	N/A	N/A
   DSP Pension Fund	12.04	4.27%	N/A	N/A	N/A	N/A
   NPS Benchmark Index	-	4.91%	7.78%	6.73%	6.65%	7.13%

4. Best NPS Fund Manager for Alternatives: Scheme A

   Scheme A allocates up to 5% of its portfolio to alternative assets such as REITs, InvITs, AIFs, and commercial mortgage-backed securities. In this category, HDFC Pension Management and ICICI Prudential have consistently delivered strong performance compared to their peers.

   Pension Fund Manager	NAV (₹)	1Y Return	3Y Return	5Y Return	Since Inception
   HDFC Pension Management	16.85	8.45%	9.12%	8.85%	9.15%
   ICICI Prudential Pension Fund	16.42	8.12%	8.95%	8.62%	8.92%
   Kotak Mahindra Pension Fund	15.98	7.90%	8.65%	8.35%	8.55%
   Aditya Birla Sun Life Pension	15.10	7.85%	8.40%	8.10%	8.25%
   SBI Pension Funds	15.22	7.50%	8.25%	8.02%	8.18%
   UTI Pension Fund	14.88	7.20%	8.10%	7.85%	8.05%
   Scheme A Benchmark	-	7.80%	8.50%	8.20%	-

NPS Tier II Returns by Pension Fund Managers

Tier II is a flexible and voluntary savings account that offers full liquidity, with no lock-in period. However, the Tier II Tax Saver variant (available only to Central Government employees) has a mandatory lock-in period of three years and qualifies for tax benefits under Section 80C.

NPS Returns by Pension Fund Managers for Government Subscribers

Government subscribers, including Central and State Government employees, are required to make contributions that are managed under dedicated government portfolio frameworks. These funds are handled by designated pension fund managers such as SBI, LIC, and UTI, in accordance with prescribed guidelines.

1. Central Government Scheme Returns

   Pension Fund Manager	NAV (₹)	1Y Return	3Y Return	5Y Return	7Y Return	10Y Return
   LIC Pension Fund (Central)	49.56	2.83%	9.01%	7.52%	8.25%	8.82%
   UTI Pension Fund (Central)	48.90	3.02%	9.01%	7.48%	8.30%	8.75%
   SBI Pension Funds (Central)	50.12	3.15%	8.73%	7.18%	8.10%	8.62%

2. State Government Scheme Returns

   Pension Fund Manager	NAV (₹)	1Y Return	3Y Return	5Y Return	7Y Return	10Y Return
   LIC Pension Fund (State)	44.09	2.83%	9.01%	7.49%	8.20%	8.78%
   UTI Pension Fund (State)	44.02	3.15%	8.95%	7.42%	8.22%	8.70%
   SBI Pension Funds (State)	45.20	3.22%	8.68%	7.15%	8.05%	8.58%

3. Atal Pension Yojana Returns

   Pension Fund Manager	NAV (₹)	1Y Return	3Y Return	5Y Return	7Y Return	Since Inception
   SBI Pension Funds (APY)	38.45	4.12%	8.15%	7.25%	8.05%	8.92%
   LIC Pension Fund (APY)	37.82	3.95%	8.08%	7.18%	7.98%	8.85%
   UTI Pension Fund (APY)	37.60	4.02%	8.10%	7.20%	8.00%	8.88%
   APY Benchmark Index	-	3.88%	7.85%	7.02%	7.80%	-

Pension Fund Manager Profiles

A pension fund manager under NPS is responsible for investing subscriber contributions across approved asset classes in line with PFRDA guidelines, with the aim of balancing risk and long-term retirement growth.

1. SBI Pension Funds

   • Overview: SBI Pension Funds Pvt. Ltd. is the largest pension fund manager in India, accounting for a significant share of total NPS assets under management.
   • Investment Approach: Follows a conservative to balanced strategy, with a focus on stable large-cap equities and high-quality sovereign and AAA-rated debt instruments.
   • Suitable For: Conservative investors and government employees seeking scale, stability, and institutional credibility.

2. HDFC Pension Management

   • Overview: HDFC Pension Management is the leading private sector pension fund manager in terms of market share and retail participation.
   • Investment Approach: Adopts a growth-oriented strategy in equity (Scheme E), complemented by selective investments in higher-yield corporate bonds under Scheme C.
   • Suitable For: Investors with a higher risk appetite aiming for long-term wealth creation through equity exposure.

3. LIC Pension Fund

   • Overview: Supported by Life Insurance Corporation of India, LIC Pension Fund manages a substantial base of government and retail assets.
   • Investment Approach: Maintains a defensive portfolio with a strong inclination towards fixed-income securities, particularly government bonds.
   • Suitable For: Risk-averse investors, especially those nearing retirement, who prioritise capital preservation over higher returns.

4. Other PFRDA-Registered Fund Managers

   • ICICI Prudential Pension Fund: Known for strong performance in Scheme E and Scheme A, supported by an active equity investment strategy.
   • Kotak Mahindra Pension Fund: Demonstrates consistent performance in corporate debt (Scheme C) along with stable equity returns.
   • UTI Retirement Solutions: A default manager for government schemes, offering reliable performance across asset classes.
   • Aditya Birla Sun Life Pension Fund: Focuses on dynamic asset allocation, particularly in response to interest rate movements.
   • Tata Pension Management: A relatively new entrant with notable short- to medium-term equity performance.
   • Max Life Pension Fund: Emphasises safety through high-quality corporate bond investments and transparent credit selection.
   • Axis Pension Fund: Uses a systematic approach to equity selection and focuses on shorter-duration corporate debt strategies.
   • DSP Pension Fund: Applies a quantitative, research-driven approach to both equity and debt investments, aiming for risk-managed growth.

How to Choose the Best NPS Fund Manager

Selecting the right NPS fund manager involves evaluating long-term performance, scale of operations, and risk management practices to ensure your retirement savings are managed efficiently within PFRDA guidelines.

1. Consistency of Long-Term Returns

   It is important not to rely solely on short-term performance indicators such as one-year returns. Instead, evaluate a fund manager's performance over longer periods, such as five and ten years. Consistent performance across different market cycles is a more reliable indicator of capability, as demonstrated by managers like ICICI Prudential and HDFC Pension Management.

2. Assets Under Management and Subscriber Base

   A higher level of assets under management (AUM) generally reflects operational scale and investor confidence. Larger AUM can contribute to better liquidity, more efficient trade execution, and lower costs due to PFRDA's tiered fee structure. Fund managers such as SBI, LIC, and HDFC collectively account for a substantial share of total NPS assets.

3. Risk Management and Equity Exposure

   Assess how effectively a fund manager manages risk, particularly during periods of market volatility. For corporate debt (Scheme C), preference should be given to managers that maintain exposure to high-quality instruments and avoid lower-rated securities. In government securities (Scheme G), consider whether the manager actively manages duration to benefit from interest rate movements while maintaining stability.

4. Compare Best Fund Managers with PensionBazaar

   Evaluating the performance of different pension fund managers can be complex, but PensionBazaar simplifies this process through a unified comparison platform. As an authorised NPS aggregator, it enables investors to assess and select fund managers based on clear, data-driven insights.

   • Compare Historical Returns: Review 3-year, 5-year, and 10-year performance across asset classes such as Equity (Scheme E), Corporate Debt (Scheme C), and Government Securities (Scheme G).
   • Monitor AUM and Market Position: Analyse assets under management and overall market presence of leading fund managers, including SBI, HDFC, ICICI Prudential, and LIC.
   • Easy Fund Manager Switching: Change your pension fund manager or adjust your asset allocation online without the need for physical documentation.

   This structured approach allows investors to make informed decisions and align their NPS portfolio with long-term retirement objectives.

How to Change Your NPS Fund Manager

NPS subscribers can switch their Pension Fund Manager once in a financial year at no cost, allowing flexibility to align their investments with changing performance and preferences.

Subscribers can change their NPS Pension Fund Manager online once per financial year, free of cost, for both Tier I and Tier II accounts.

Steps to switch your PFM online:

1. Log in to your Central Recordkeeping Agency (CRA) portal, such as Protean, KFintech, or CAMS.
2. Go to Transact Online and select Change Scheme / Preference.
3. Choose the relevant account type (Tier I or Tier II).
4. Select your preferred Pension Fund Manager and confirm the asset allocation.
5. Complete authentication using the OTP sent to your registered mobile number and email.
6. The request is processed, and the change is typically completed within T+2 working days.

Note: Scheme allocation changes within the same fund manager are permitted up to four times in a financial year.