Pension Fund Managers (PFMs) are entities appointed by the Pension Fund Regulatory and Development Authority (PFRDA) to manage the investment of contributions made into National Pension System (NPS) accounts. These PFMs play a crucial role in helping subscribers achieve their retirement goals by investing their contributions across various asset classes.
Here are some details about PFMs in the NPS:
- Authorization: PFMs are authorized by the PFRDA to manage NPS funds. They undergo a rigorous selection process and must comply with regulatory requirements to ensure the safety and security of subscribers’ investments.
- Types of PFMs: There are several PFMs operating in the NPS, including public sector banks, private sector banks, financial institutions, and asset management companies. Each PFM may have its own investment philosophy, fund management strategy, and track record.
- Investment Options: PFMs offer different investment options to NPS subscribers based on their risk appetite and investment goals. These options may include:
- Equity Funds: Invest primarily in equities and related instruments, offering potentially higher returns over the long term but with higher volatility.
- Corporate Bond Funds: Invest in high-rated corporate bonds, providing stable returns with relatively lower risk compared to equities.
- Government Securities Funds: Invest in government bonds and securities, offering safety and stability but with potentially lower returns.
- Alternative Investment Funds: Invest in alternative asset classes such as real estate investment trusts (REITs), infrastructure investment trusts (InvITs), etc., offering diversification and potentially higher returns.
- Performance Track Record: PFMs’ performance is regularly monitored and evaluated by the PFRDA to ensure adherence to investment guidelines and to safeguard the interests of NPS subscribers. Subscribers can access information about PFMs’ historical performance, fund management fees, and other relevant details to make informed investment decisions.
- Customer Service: PFMs provide customer support and assistance to NPS subscribers regarding account-related queries, investment options, fund performance, etc. Subscribers can contact PFMs directly or through their Point of Presence (POP) for any assistance related to their NPS accounts.
- Fees and Charges: PFMs may charge fund management fees for managing NPS investments. These fees are deducted from the returns generated by the investments and are typically expressed as a percentage of the assets under management.
National Pension System (NPS) in India:
- LIC Pension Fund Limited
- SBI Pension Funds Private Limited
- UTI Retirement Solutions Limited
- HDFC Pension Management Company Limited
- ICICI Prudential Pension Funds Management Company Limited
- Kotak Mahindra Pension Fund Limited
- Birla Sunlife Pension Management Limited
- Reliance Capital Pension Fund Limited
It’s important for NPS subscribers to carefully evaluate the performance, investment options, and fees associated with different PFMs before choosing one for their NPS investments. Additionally, subscribers should review their investment strategy periodically and make adjustments as per their changing financial goals and risk tolerance.