NPS vs benchmarks: how is your retirement fund measuring up?

Evaluating equity and debt NPS schemes against market indices to assess their true performance over the years

- Jash Kriplani

The National Pension System (NPS) is among two key retirement schemes in India. The other one is the Employee Provident Fund (EPF), which employees and employers are required to contribute to mandatorily. Depending on their risk appetite, investors can opt for equities to maximize the return potential in NPS or even combine it with debt (corporate or government securities).

Here is a look at how equity and debt categories of NPS schemes have performed over time versus the respective benchmark indices.

Past performance

A three-year rolling return analysis of NPS equity schemes--with at least a 10-year track record--showed average returns of 13.5%. Net asset value (NAV) history from 28 February 2015 to 28 February 2025 was considered, with the first three-year return observed on 28 February 2018.

In this analysis, returns were rolled daily starting from 28 February 2018. There were 1,699 observations, with calculations based on the historical NAV data from npstrust.org.in. Five NPS schemes were excluded from the analysis as they didn't have a 10-year NAV history and were launched in the last two to three years.

HDFC Pension Fund had the highest average three-year return at 14.2%. ICICI Prudential Pension Fund, Kotak Mahindra Pension Fund, and UTI Pension Fund each offered 13.7%. SBI Pension Fund and LIC Pension Fund had about 13% average returns. For six schemes, three-year returns were largely in the 12-14% range.