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Summary
The National Pension System (NPS) offers multiple fund managers and asset allocation options. The comparison calculator shows returns across different fund managers (SBI, LIC, HDFC, ICICI, Kotak, UTI, Birla, DSP, Max Life, Tata) and asset classes (Equity E, Corporate Bond C, Government Bond G, Alternative A) to help you choose the optimal combination for your risk profile.
How it works
NPS asset classes
| Class | Asset type | Risk | Typical return |
|---|---|---|---|
| E (Equity) | Large-cap stocks | High | 10-14% long-term |
| C (Corporate Bond) | Corporate debt | Medium | 8-10% |
| G (Government Bond) | Government securities | Low | 7-9% |
| A (Alternative) | REITs, InvITs, AIF | Medium-High | Varies |
Allocation choices
Active choice: You set the allocation (max 75% equity up to age 50, reducing by 2.5% each year after) Auto choice: PFRDA sets allocation based on your age:
- Aggressive (LC75): 75% equity at 18, reducing to 15% at 55
- Moderate (LC50): 50% equity at 18, reducing to 10% at 55
- Conservative (LC25): 25% equity at 18, reducing to 5% at 55
Tax benefits
- Section 80CCD(1): Up to 10% of salary (within 80C limit of Rs 1.5 lakh)
- Section 80CCD(1B): Additional Rs 50,000 deduction (exclusive to NPS)
- Section 80CCD(2): Employer contribution up to 14% of salary (available in both old and new regime)
- On withdrawal at 60: 60% of corpus is tax-free, 40% must be used to buy an annuity
Worked example
Monthly NPS contribution: Rs 10,000, Age: 30, Retirement: 60, Aggressive allocation
Projected corpus at 12% equity return:
- Total contributions: Rs 10,000 x 12 x 30 = Rs 36,00,000
- Projected corpus: approximately Rs 3,52,99,000 (Rs 3.53 crore)
- Tax-free portion (60%): Rs 2,11,80,000
- Annuity portion (40%): Rs 1,41,20,000
- Monthly pension from annuity (at 6% rate): approximately Rs 70,600
Inputs explained
- Monthly contribution — how much you invest in NPS
- Current age and retirement age — investment timeline
- Asset allocation — equity/corporate bond/government bond split
- Fund manager preference — compare returns across managers
Outputs explained
- Projected corpus — estimated NPS fund value at retirement
- Fund manager comparison — returns across managers for each asset class
- Tax saving — annual tax benefit from 80CCD(1B)
- Pension estimate — expected monthly pension from the annuity portion
Assumptions & limitations
- Past returns do not guarantee future performance. Fund manager rankings change over time.
- Annuity rates (for the mandatory 40% portion) depend on market conditions at retirement and are not guaranteed.
- NPS has limited liquidity — partial withdrawal is allowed after 3 years only for specific purposes (education, marriage, illness, home purchase).
- The auto-choice lifecycle automatically reduces equity allocation with age, which may not suit all investors.
- Exit before age 60 requires 80% of corpus to be used for annuity purchase (only 20% lump sum).
Sources
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