State Government employees do not have the active choice when investing NPS for retirement...
19-Jun-2013 •Research Desk
I am 28-years old. It is compulsory for me to chose NPS as a pension option at my workplace- State Bank of Hyderabad. I am aware that equity investments are best for long term. I doubt if I have ‘Active’ option available in three of the available schemes (E,C and G). If it is available, which is the best Pension Fund Manager (PFM) in NPS? Considering the past performance of all PFMs please suggest how to proceed from here.
-Vinay
State Government employees do not have the ‘active’ choice available for NPS investing. Under active choice the subscriber has the option to decide how his money can be invested in the three asset classes- equity (E), Liquid funds, fixed deposits, corporate bonds, PSU and Infra bonds (C) and state and government securities (G) with a ceiling of 50 per cent in E class.
The present guidelines of Pension Fund Regulatory and Development Authority(PFRDA) state that the employees of State Government and State Autonomous Bodies need not mention any scheme details while filling up the PRAN (Permanent Retirement Account Number) form.
Your contribution towards pension will be invested in the default schemes of the three Pension Fund Managers (PFM)- LIC Pension Fund Limited, SBI Pension Funds Pvt. Limited and UTI Retirement Solutions Limited.
The proportion in which contributions are allocated among these three PFMs is decided by each of the state government, which is mentioned in the Statement of Transaction. Each of the PFMs will invest the funds in the proportion of 85 per cent in fixed income instruments and 15 per cent in equity and equity related instruments.
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