The recent slide in benchmark equity indices in October—November 2024 has further pulled down the average annual returns on NPS monies parked in equity scheme to 26.6 per cent as of November 30, latest PFRDA data showed.
This is against an annual return of near 40 percent recorded as of September 28. As of November 10, the return was down to 30 percent.
Both Sensex and Nifty50 had fallen over 8 percent from their record high hit in September 2024, sending investors in a tizzy.
While Nifty50 reached a lifetime high of 26,277.35 on September 27, Sensex had on the same day hit a record peak of 85,978 on the same day. Nifty50 has seen a sharp 2150 points fall (over 8 per cent fall) since end September, weighed down by lacklustre Q2 corporate earnings and record FPI pullout owing to ‘Trump Trade’ amid rising U.S. yields.
However, overall NPS Assets Under Management (AUM) inched up to touch ₹13.55 lakh crore as of November 30, from a level of ₹13.46 lakh crore as of November 10. NPS assets grew robust 28.26 percent on a year-on-year basis as of November 30, official data showed.
As of end September, overall NPS assets stood at ₹13.40 lakh crore, up 32 per cent on year-on-year basis.
Nifty50 had closed October 2024 in deep red, nosediving by 6.2 percent. This was the worst monthly performance for Nifty50 since the first wave of Covid19 that shook the world in March 2020. BSE Sensex saw a 5.83 percent decline in October 2024.
Although average annual equity scheme returns moderated since end September, it was much higher than the 12.55 percent in central government scheme and 12.63 percent in State government scheme. Average return generated by Pension Funds for Atal Pension Yojana in the last one year stood at 12.65 percent, while the return was 9.18 percent since inception.
In the last one year, riding on buoyant equity markets, the NPS monies parked in pure Equities has given astronomical returns going up to as high as 40 percent.
NPS scheme has generated competitive returns since inception. For the government sector, NPS has given an average return of 9.5 percent since inception. For the non-government sector, the equity scheme has given return of 13.65 percent, corporate debt 9.12 percent and government securities 8.80percent.
Private Sector AUM
Private sector NPS assets growth saw further moderation, clocking a 37.67 percent growth at ₹ 2.71 lakh crore as of November 30.As of end October, it was ₹2.70 lakh crore, up 44.52 percent on a year-on-year basis.
The number of NPS subscribers in the non-government sector (private sector) also saw impressive growth, with a 21.51 percent year-on-year rise to 61.20 lakh, latest data from the Pension Fund Regulatory and Development Authority (PFRDA) showed.
The private sector’s strong NPS assets growth of 37 percent has substantially outpaced the government sector’s 27 percent year-o-year growth, albeit on a much higher base.
Government sector (Centre and State government) NPS assets touched ₹ 10.37 lakh crore as of November 30, PFRDA data showed. This was higher than the ₹ 10.23 lakh crore AUM as of end September 2024.
The surge in private sector NPS assets highlights the rising appeal of NPS as a preferred retirement savings vehicle, say pension industry observers.
This steady increase in participation underscores the private sector’s ongoing recognition of NPS as a flexible, cost-effective, and tax-efficient solution for long-term financial planning, they added.
Corporate Sector NPS
Corporate sector related NPS continued to show robust growth in AUM at ₹ 2.02 lakh crore as of November 30 (₹ 1.46 lakh crore as of Dec 2 last year). The ‘All Citizen Model’ (basically individuals) had assets to tune of ₹ 68,795 crore.
The number of subscribers in Corporate sector (employees of companies who have signed up) stood at 21.92 lakh, while there are 39.28 lakh subscribers in ‘All Citizen Model’.
