NPS Delivers 13% Average Annual Returns Since Launch: FM Sitharaman | Savings and Investments News

NPS Proves High-Performing, Cost-Effective Pension Tool With Double-Digit Returns

Finance Minister Nirmala Sitharaman said that National Pension Scheme (NPS) has delivered more than 13 per cent average annual returns since the launch, marking as one of the best global investment products. While speaking at the NPS Diwas conference in New Delhi, FM said that NPS has emerged as a high-performing and cost-effective retirement planning tool.

She further stated that debt and government securities have also delivered good returns to investors, giving around 9 per cent annually.

Sitharaman said as quoted by ANI that the schemes under NPS have generated attractive returns. “The average annual returns since inception under the equity scheme have been over 13 per cent, and around 9 per cent for Corporate Debt and Government Securities,” she added.

Sitharaman also made a case to expand the scope of NPS to the informal sector and gig workers through simpler onboarding, stronger pension security for women and early financial literacy in schools and colleges.

The government has done a major overhaul in NPS from October 01 with the introduction of the Multiple Scheme Framework (MSF) for non-government sector (NGS) subscribers.

The reform, introduced under Section 20(2) of the PFRDA Act, 2013, will allow subscribers such as corporate employees, professionals, self-employed individuals, and gig economy workers to access and manage multiple schemes under a single Permanent Account Number (PAN). Earlier, subscribers could operate only one investment choice per tier.

Moreover, they can select up to 100% equity exposure in their schemes.

The scheme, introduced by the NDA government in 2004, replaced the earlier defined-benefit pension model with a defined-contribution framework. Initially meant for government employees, it was later extended to all citizens, including private sector workers and the self-employed.

This year the government has also introduced another pension scheme for central government employees called Unified Pension Scheme (UPS). It became effective from April 01, 2025.

Basically, UPS is a fund-based payout system which relies on the regular and timely accumulation and investment of applicable contributions (from both the employee and the employer (the Central Government) for grant of monthly payout to the retiree.

UPS is for Central Government Employees (including civilians in Defence Services) appointed on or after 1st January 2004, who are covered under the National Pension System (NPS) and opt for UPS.