'Inflation-indexed annuity can lead to higher payouts'

National Pension System (NPS) subscribers should compare annuity providers for competitive rates, select annuity types aligned with their needs, and consider locking in rates now as interest rates decline over time.

- Rahul Bhagat, CEO, DSP Pension Fund Managers

Rahul Bhagat, CEO, DSP Pension Fund Managers, tells Saikat Neogi that innovative solutions like variable annuities, inflation-indexed annuities and hybrid annuities can make rates more attractive.

Excerpts: Given the current market volatility, should NPS investors modify their asset allocation? NPS investors should avoid making asset allocation decisions based on market movements in the short-term. For those under 40, maintaining high equity exposure captures long-term growth potential. As retirement nears, shifting towards government bonds and corporate debt adds stability. The Auto Choice option naturally adjusts allocation over time, making it a reliable default strategy. Active Choice users must remain disciplined and avoid decisions driven by market volatility.