Choosing the Right NPS Fund Manager: Insights from Subhasis Ghosh
When it comes to retirement planning, flexibility and control are often underrated. With the National Pension System (NPS), not only can you choose how much and how often you invest, but you also have the power to select who manages your money.
In Episode 7 of 'NPS Made Simple: Your Pension Partner for Life', Subhasis Ghosh, CEO of Kotak Mahindra Pension Fund, helps demystify a key decision-making point: How to choose the right Pension Fund Manager (PFM)?
Through the case of Vinay, 42, who is reviewing his portfolio and wondering whether to switch PFMs, the episode explores how fund managers in NPS work, what investors should look for, and why this choice matters for long-term wealth creation.
Who are the authorized Pension Fund Managers (PFMs) under NPS?
All PFMs operating under NPS are approved by PFRDA (Pension Fund Regulatory and Development Authority). The criteria for selection are stringent, covering financial strength, experience, and regulatory compliance. Currently, only 10 PFMs are authorized to manage NPS funds in India. They've all passed a tough filter, and many have over five years of consistent performance to showcase . You can view their track records and fund-specific data on the NPS Trust website, which regularly updates performance by asset class.
Yes. Every PFM is authorized to manage all four asset classes under NPS: E – Equity
C – Corporate Bonds
G – Government Securities
A – Alternate Assets
This means that you can have one PFM managing all your investments, or you can split them up based on performance. For instance, a subscriber can choose one PFM to manage equity exposure and another to manage government securities.
You can allocate different PFMs for Tier I and Tier II accounts as well, giving you access to up to six different PFMs if you want to tailor it that way,' Ghosh explains.
Absolutely. NPS allows you to switch your PFM once every financial year. This gives subscribers the freedom to pivot based on performance or preference—something most traditional pension plans do not offer.
This switch is free of cost, and there is no tax implication for reallocating assets between PFMs or across asset classes, unlike mutual funds or FDs, where such moves may incur exit loads or capital gains tax.
This is where it gets interesting. Should you choose a fund house based on its brand? Its track record in mutual funds? Or stick to the performance data? All 10 PFMs are reputable and monitored. What separates them is their performance history—how they've managed returns across equity and debt, consistently, over the years.
Long-term returns across PFMs are publicly available. Look at the 7-year or 10-year CAGR (Compound Annual Growth Rate) across asset classes, and how stable the fund has been in both bull and bear markets.
This flexibility is valuable not just for seasoned investors but for anyone serious about retirement. In fact, with volatility in equity and debt markets, being able to course-correct annually by switching PFMs or tweaking asset allocation is a strategic advantage. Don't get swayed by one-year highs. Look for fund managers with long-term discipline and patience. After all, NPS is a retirement vehicle—it's not about short-term wins.'
One word: Patience. Ghosh emphasizes that the goal of an NPS fund manager should be to generate sustainable returns over decades, not to chase immediate spikes. This isn't about reacting to every market movement. It's about building stability for your 60s, 70s, and beyond.'
To ensure safety, NPS equity investments are limited to the top 200 companies by market capitalization, keeping the risk profile lower than mid- or small-cap-heavy funds.
NPS isn't just about where your money goes—it's also about who helps it grow. With the freedom to choose (and change) your Pension Fund Manager, subscribers can stay agile without sacrificing stability.
Make use of the data, review your portfolio every year, and don't hesitate to shift if needed,' Ghosh advises. 'The system is designed to empower you.'
First Published: 29 Apr 2025, 06:03 PM IST
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
9 hours ago
- Time of India
Chennai Water Reservoir: Chennai Awards ₹258 Crore Contract for New Water Reservoir Project at Porur, ET Infra
Advt The city is to get another water reservoir, at Porur. Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB), the city's water agency which is popular as Metrowater has handed over a ₹258-crore contract to a consortium of SPML Infra and JWIL Infra that will build the managing director T G Vinay said the reservoir, which will have a storage capacity of 15 million litres, will come up on 11,486 sq m at Porur and will benefit people in areas such as Manali, Madhavaram, and at least 10,000 residents in parts of South Chennai. Additionally, 100 MLD (million liters a day) of water will be supplied to residents in Tambaram Corporation and 20 urban local bodies (ULBs) under CMA, he added.A Letter of Acceptance (LoA) was issued to JWIL Ltd, and preliminary survey work began, marking the first step of the 18-month-long project. The project involves building a reinforced cement concrete reservoir with dimensions of 76 x 45.5 metres and a depth of 5.25 metres. A high-capacity pumping station with a total pump output of 3,646 m³/hour and a 25-metre head will be built to handle up to 350 will be pumped from the Perur pumping station at a total capacity of 400 MLD and connected to the existing transmission network. The project includes several key stages, such as detailed surveys, construction of pumping stations and chlorine buildings, installation of mechanical and electrical systems, pipeline connections to existing water mains, and final testing and the ₹258 crore, ₹205.99 crore is funded by the Japan International Cooperation Agency (JICA), while the operational expenditure of ₹51.99 crore will be covered by the state govt. As part of the agreement, the SPML-JWIL consortium will take responsibility for operations and maintenance (O&M) of the infrastructure for 20 years. Service Level Agreements (SLAs) will ensure consistent quality and performance during this period, Vinay Infra chairman Subhash Sethi said the project will strengthen Chennai's water supply infra.
Indian Express
11 hours ago
- Indian Express
‘My manager had to do interventions': Nora Fatehi reveals how her unchecked shopping sprees impacted her bank account
Like any other girl, Nora Fatehi too is a fan of handbags and designer accessories. In a recent conversation with Instant Bollywood, the Royals actor opened up about her shopping sprees and the impact that has on her bank account. When asked what was her first luxury purchase, Fatehi revealed it to be a bag. 'It was a luxury bag. I love my bags. My handbags have broken my account. My Moroccan manager has had to like do interventions on me, sit me down and say — 'Look at your statement, it says LV, Dior, enough. You need to invest in your future. So I had to change the way I was spending.' Sharing deeper insight into her mindset back then, she added: 'It's like a complex, when you are younger you see people with all these things that you can't get. And then you're like, one day, I'll get everything.' Counselling psychologist Priyamvada Tendulkar calls Fatehi's behaviour a prime example of 'scarcity mindset' – a concept that began from the popular economy mindset aka the fixed vs growth mindset. The economy mindset starts off on the premise that things in the world are 'zero sum' and thus, for you to win, others have to lose, or if others win, you lose. 'While this is not necessarily wrong — this is how schools often make us think too — it sets us up to compete in a very zero-sum way. Despite attempts to balance it out with collaborative events and team work through sports, projects, class, houses, etc,' she explains. However, when this becomes your core mindset, Tendulkar says that the world is ruled by the fear of losing. One is caught up in some competitive race-format — they do not try to become better and are constantly trying to be risk averse. Once you tackle your scarcity mindset, next comes building a robust financial discipline, which includes an essential foundation of understanding financial instruments. Mukesh Pandey, Director of Rupyaa Paisa, told that in this day and age, it is no longer a matter of choice — having even a basic understanding of key financial instruments like Fixed Deposits, Mutual Funds, Public Provident Fund (PPF), Health & Life Insurance, National Pension Scheme (NPS), Share Investment Plans (SIP) will allow you to keep some control of your financial journey and decisions. According to Panday, India is still far behind in financial literacy. 'A SEBI survey found that only 27% of Indians are financially literate. This suggests that almost three-fourths of our population may be investing without fully understanding where their money is going and what risk issues a particular instrument is associated with,' he shared. Today, digital accessibility has already made financial products a click away, but with that ease of access comes responsibility. 'Understanding how to benefit from compounding through SIPs, tax-saving opportunities through ELSS or PPF, or even knowing the difference between term insurance and an investment-linked policy can change your financial journey,' stressed Pandey. Instead of just letting someone else manage your money, he believes it is crucial to create awareness around your money; ultimately, awareness is the biggest asset you could have. 'Consider that simply making a habit of 15 minutes a week to inform yourself about a financial concept will change the game of financial understanding and ultimately planning,' she said, adding that 'financial awareness is not about knowing all – it is about knowing enough and protecting your future'. DISCLAIMER: This article is based on information from the public domain and/or the experts we spoke to. Always consult your health practitioner/an expert before starting any routine.
Time of India
16 hours ago
- Time of India
258cr contract for water reservoir at Porur awarded
Chennai: The city is to get another water reservoir, at Porur. Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB), the city's water agency which is popular as Metrowater has handed over a 258-crore contract to a consortium of SPML Infra and JWIL Infra that will build the reservoir. Metrowater managing director T G Vinay said the reservoir, which will have a storage capacity of 15 million litres, will come up on 11,486 sq m at Porur and will benefit people in areas such as Manali, Madhavaram, and at least 10,000 residents in parts of South Chennai. Additionally, 100 MLD (million liters a day) of water will be supplied to residents in Tambaram Corporation and 20 urban local bodies (ULBs) under CMA, he added. A Letter of Acceptance (LoA) was issued to JWIL Ltd, and preliminary survey work began, marking the first step of the 18-month-long project. The project involves building a reinforced cement concrete reservoir with dimensions of 76 x 45.5 metres and a depth of 5.25 metres. A high-capacity pumping station with a total pump output of 3,646 m³/hour and a 25-metre head will be built to handle up to 350 MLD. Water will be pumped from the Perur pumping station at a total capacity of 400 MLD and connected to the existing transmission network. The project includes several key stages, such as detailed surveys, construction of pumping stations and chlorine buildings, installation of mechanical and electrical systems, pipeline connections to existing water mains, and final testing and commissioning. Of the 258 crore, 205.99 crore is funded by the Japan International Cooperation Agency (JICA), while the operational expenditure of 51.99 crore will be covered by the state govt. As part of the agreement, the SPML-JWIL consortium will take responsibility for operations and maintenance (O&M) of the infrastructure for 20 years. Service Level Agreements (SLAs) will ensure consistent quality and performance during this period, Vinay added. SPML Infra chairman Subhash Sethi said the project will strengthen Chennai's water supply infra.
