National Pension Scheme #AdvancedInvestor

Now that you know what is NPS & how to invest, let’s deep dive into how to manage it, evaluate its performance & how to ensure it brings the right balance to your entire portfolio.

What asset classes are available for investments under NPS?

The asset classes are the same for both NPS Tier 1 and Tier 2 Account except for Asset class A

Asset Class E: Investments predominantly in Equity market instruments.

Asset Class C: Investments in fixed income instruments other than Government securities.

Asset Class G: Investments in Government securities

*Asset Class A: Investments are being made in instruments like InvITs, REITS, AIFs, etc. (only available for Tier 1 Accounts) 

How should I divide my NPS funds between asset classes E, C, G and A?

That depends on your risk appetite. If you are not sure of it, simply select an NPS lifecycle fund. These funds will automatically set your asset allocation according to your age and rebalance it every year.

Which pension funds are listed under NPS?

At present there are 8 fund managers who are managing the deposits of NPS subscribers to maximize returns:

– Birla Sun Life Pension Fund Ltd

– HDFC Pension Management Co. Ltd

– ICICI Prudential Pension Fund Management Ltd

– Kotak Mahindra Pension Funds Ltd

– LIC Pension Fund Ltd

– Reliance Capital Pension Fund Ltd

– SBI Pension Fund Pvt. Ltd

– UTI Retirement Solutions Ltd

How can I choose a Pension Fund Manager (PFM) in the NPS?

You have to analyse the previous performance of the different pension fund managers. You can get data on this at https://www.npstrust.org.in/weekly-snapshot-nps-schemes You can also change your NPS fund manager once in a financial year.

What are the other options available for retirement planning other than NPS? Why you may want to skip investing in NPS?

NPS is one of the instruments to plan for your retirement. You may want to skip NPS because of the following reasons: Your money is locked in till the age of 60 years, have restrictions on withdrawals in the case of Tier-1 Account, etc. Therefore, it’s important to consider all options available and select the one as per your goals and risk appetite and make an asset allocation strategy for yourself. It’s always good to diversify when investing!

What happens in the case of the death of an individual (irrespective of cause)? 

The entire corpus (100%) would be paid to the nominee / legal heir of the investor. The nominee, if so wishes, has the option to purchase an annuity of the total corpus. 

Can I appoint nominees for the NPS Tier I Account?

Yes, you need to appoint a nominee at the time of opening an NPS account in the prescribed section of the opening form. You can appoint up to 3 nominees for your NPS Tier I account and you have to specify the percentage that you wish to allocate to each nominee summing up to 100%.

What is the Grievance redressal mechanism for NPS?

The subscriber can raise grievance through any of the modes mentioned below: 

• Call Centre/Interactive Voice Response System (IVR) – The Subscriber can contact the CRA call center at toll-free telephone number 1-800-222080 and register the grievance by using T-PIN.  Dedicated Call center executives. 
• Physical forms direct to CRA – The Subscriber may submit the grievance in a prescribed format to the POP-SP who would forward it to CRA Central Grievance Management System (CGMS).  Subscribers can directly send the form to CRA. 
• Web-based interface – The Subscriber may register the grievance at the website www.npscra.nsdl.co.in with the use of the I-pin allotted at the time of opening a Permanent Retirement Account.