Latest news with #SubhasisGhosh
Mint
29-04-2025
- Business
- Mint
The NPS Wrap-Up: Myths, Mindsets & Long-Term Gains
After covering everything from Tier 1 and Tier 2 accounts to annuities, withdrawals, and tax benefits, the final episode of the 'NPS Made Simple' series brings it all together in a rapid-fire format, packed with bite-sized insights and some bigger reflections on retirement planning. This episode with Subhasis Ghosh, CEO of Kotak Pension Fund, cuts through the noise around retirement myths, SIPs vs lump-sum, early retirement, and even how to explain the NPS to a 7-year-old. The debate ends here. According to Ghosh, SIP (Systematic Investment Plan) wins hands down, especially when market timing is uncertain. Regular investing not only smooths out market volatility but also builds long-term financial discipline. "Time in the market is more important than timing the market," he emphasizes. While most seasoned investors focus on Tier 1 for its retirement benefits, Ghosh points out that Tier 2 is often overlooked. 'It's flexible, easy to withdraw, and offers the same low fund management cost,' he explains. Investors can use Tier 2 for short-term savings and even transfer it to Tier 1 later for tax benefits. Think of it as your liquidity cushion with long-term advantages. One of the biggest misconceptions about NPS, Ghosh says, is that your money is 'locked forever.' That's far from true. While Tier 1 is designed for retirement, it allows partial withdrawals for emergencies. And Tier 2 offers complete flexibility. In one of the most thoughtful moments in the series, Ghosh shares a personal take on what retirement means. 'It's not about stopping work,' he says. 'It's about doing what you couldn't do earlier.' Whether it's joining an NGO, traveling, or mentoring, staying engaged is key—not just for financial security but also for emotional and mental well-being. The final episode also dives into the FIRE movement. Can the average salaried employee in India realistically retire early? 'It's possible—but only if your lifestyle is sustainable and you start saving early,' Ghosh shares. Still, he cautions against seeing FIRE as an end in itself. "You have a talent—use it for society. How much can you swim in the sea or walk in the hills?" Ghosh wraps up with a powerful call for financial literacy, beginning at home. He introduces NPS VatSLay, a scheme that allows parents to open accounts for children from birth till age 18. 'Start early. Make them see the power of savings. That's the best gift you can give your child.' NPS, he says, isn't just a product. It's a mindset about taking charge of your future and making intentional choices. With India at the cusp of an economic transformation and the cost of living on the rise, planning today can give you the freedom to live fully tomorrow. Watch Episode 10 and start planning your retirement journey with clarity, confidence, and a long-term perspective. First Published: 29 Apr 2025, 06:04 PM IST
Mint
29-04-2025
- Business
- Mint
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
Mint
29-04-2025
- Business
- Mint
Building Financial Security Across Generations with NPS
In Episode 9 of NPS Made Simple: Your Pension Partner for Life, we explore how NPS can serve as a multi-generational wealth solution. From retirees to mid-career professionals and young earners, each family member can benefit from a stable, disciplined, and tax-efficient savings strategy. Subhasis Ghosh, CEO of Kotak Mahindra Pension Fund, breaks down how NPS supports intergenerational financial well-being and long-term independence. In this episode, we're looking at a full family: a retiree, a mid-career contributor, and a young earner. How does NPS help each of them build financial stability? It's fantastic to see a family approach retirement planning together. For the retired member, NPS offers the comfort of a guaranteed annuity — a steady income stream for life or even for the spouse's lifetime, depending on the option chosen. That removes reinvestment risk and provides great mental security. The mid-career contributor benefits from the flexibility of tier 2 accounts for contingency planning, while continuing to grow tier 1 retirement savings. And for the young investor, compounding is the superpower. Even small, regular contributions from an early age can grow into a significant corpus by retirement. That sounds like a great long-term strategy. So, how can families begin building this shared mindset around retirement? Start by talking about it early. Parents who model smart saving behavior and talk openly about money build stronger financial literacy in their children. I always say — save one-third of your income if you want a comfortable retirement. That mindset needs to be taught, just like history or math. What's your take on financial literacy in India today — is it improving? We're getting there, but the gap is still wide. More people have Demat accounts than NPS accounts, and gaming apps have far more users than either. It reflects our tendency toward instant gratification. Retirement feels far away — until it isn't. That's why financial literacy, especially around long-term planning like NPS, is critical. Is NPS alone enough, or should people have other investments too? One product is never enough. NPS should be part of a broader portfolio — PF, mutual funds, gold, etc. But what makes NPS special is the long-term discipline, the low fund management costs, the tax advantages, and the fact that you don't see the money, so you don't spend it. It's engineered to create consistency. And for those nearing retirement who may not have saved enough, is there still time? It's never too late to start, but yes, it gets tougher. The key is to adjust your lifestyle now so that you're not forced to do it later. Financial independence — especially in old age — isn't just about money. It's about self-respect. Any final thoughts for families trying to build this together? Talk to each other. Watch content like this together. If each member of the family takes ownership of their future, financial stability becomes a shared value, not just an individual goal. Watch Episode 9 to discover how families across generations can use NPS to build security, independence, and smarter savings habits — together.
Mint
29-04-2025
- Business
- Mint
Approaching Retirement? Here's How to Withdraw Smartly from Your NPS
In the latest episode of our special series on the National Pension System (NPS), Subhasis Ghosh, CEO of Kotak Pension Fund, explains how individuals nearing retirement can navigate their NPS withdrawals effectively. The episode focuses on a relatable scenario—Anjali, a 58-year-old professional, who wants to understand how and when she can access her pension funds. Yes—but with some conditions. Subhasis Ghosh clarifies that at age 60, an individual can withdraw the entire NPS corpus tax-free. However, 40% of the accumulated amount must be used to purchase an annuity from a registered annuity service provider. The remaining 60% is available as a lump sum, and retirees have the flexibility to use or reinvest it as they see fit. 'There's also a lesser-known option,' Ghosh adds. 'Instead of withdrawing the 60% immediately, you can leave it invested in NPS and opt for a systematic withdrawal plan (SWP)—monthly, quarterly, or annually—till the age of 75, all while continuing to earn returns at the lowest fund management cost in the world.' An annuity, in simple terms, is a fixed monthly or regular income purchased from a life insurance company. Ghosh outlines four popular annuity options: Basic Annuity – Only the subscriber receives income; ends upon their demise. Joint Annuity – The spouse continues to receive the annuity after the subscriber's death. Return of Purchase Price – The nominee receives the full 40% annuity corpus upon the subscriber's passing. Joint + Return – Both spouse and nominee benefit from post-retirement financial continuity. Nominees can include spouses, children, or even parents (though less common due to age considerations). Yes. Ghosh confirms that partial withdrawals are allowed up to three times before the age of 60, with each withdrawal capped at 25% of the individual's contribution (not the total fund value). This feature is especially useful in emergencies, providing access to funds without fully exiting the scheme. For Tier II account holders, the process is even more flexible. One can withdraw any amount at any time, without restrictions or lock-ins, making it a handy option for managing short-term goals. In the unfortunate event of a subscriber's death before retirement, the entire accumulated amount (principal + returns) is transferred tax-free to the nominee. 'The moment a death is reported, the contract ends, and the full amount becomes payable,' says Ghosh. The episode also touches on a common investor dilemma—should one invest a lump sum or go the SIP (Systematic Investment Plan) route? Ghosh strongly recommends regular SIP-style contributions, particularly for those closer to retirement, as it allows for market averaging and cushions against volatility. However, even an annual lump sum (like ₹ 50,000 at the end of the financial year) can be effective if done consistently. Even for those in the new tax regime, Ghosh insists that the tax-free accumulation and withdrawal benefits of NPS remain extremely attractive. 'The exemption at the time of investment is just the cherry on the cake. The real value lies in exempt-exempt-exempt (EEE) status—no tax when you invest, no tax on returns, and no tax at withdrawal.' In essence, the NPS remains one of the most tax-efficient retirement products available, even without upfront deductions. As retirement nears, it's crucial to understand not just how much you've saved—but also how to use it wisely. Whether through annuity planning, SWPs, or flexible tiered withdrawals, the NPS offers a range of tools to ensure a financially stable and stress-free retirement. Stay tuned for the next episode in our 'NPS Made Simple' series as we decode more ways to maximize your retirement journey. First Published: 29 Apr 2025, 06:06 PM IST
Mint
28-04-2025
- Business
- Mint
One ID, One Investment: Subhasis Ghosh on How to Start Your NPS Journey
If you've been thinking about opening an NPS (National Pension System) account but feel unsure about where to begin, Episode 3 of 'NPS Made Simple' breaks it down step by step. In conversation with Mint, Subhasis Ghosh, CEO of Kotak Mahindra Pension Fund, explains just how easy it is to get started—and why the system is built for lifelong flexibility. Q: So, let's say a group of young professionals or college friends, just starting their first jobs, want to open an NPS account. Where do they begin? First off, kudos to them! If they're thinking about NPS this early, they're financially ahead of the curve. To open an account, all they have to do is go through a Point of Presence (POP)—which is just a fancy term for a registered distributor. Almost every major bank is a POP. So, if you use your banking app, you'll likely find an 'Open NPS' option right there. Q: Is the process fully digital? Yes, absolutely. If your KYC is already completed with the bank, it's a two- or three-step process. Upload a few documents—Aadhaar, PAN—select your fund manager, choose between active or auto investment mode, and make your first contribution (as little as ₹ 1,000). Once done, you'll get your PRAN—Permanent Retirement Account Number—and you're officially in. Q: What is PRAN exactly? Think of it like your Aadhaar or UAN for retirement. It's your unique lifelong identity within the NPS system. Whether you switch jobs, take a sabbatical, or freelance, your PRAN remains the same. The beauty of NPS lies in this portability. Your entire pension journey is tied to this one number. Q: And POP—you said it's a kind of distributor? Yes. POPs are entities authorized to onboard NPS subscribers. Your bank is likely already a POP, and you can also find many of them online. Just Google 'NPS POPs' and you'll see a list. Most banks and even some fintechs offer this. Q: What if someone prefers an offline route? That's possible too. You can visit your bank branch or an authorized POP location. But honestly, everything—from registration to monitoring—is smoother online now. Q: Is there an official NPS app to manage investments? Yes. The NPS Trust app (operated by CRA—Central Recordkeeping Agency) allows you to track your balance, review fund performance, switch fund managers, adjust equity-debt ratio, and more. Many banking apps also offer similar features. Q: You mentioned earlier that NPS is a 'one-way street.' What does that mean? It means that once you exit the system, you can't re-enter. This isn't like mutual funds where you can jump in and out. NPS is designed to encourage long-term retirement discipline. So yes, you can exit early, but you'll have to forfeit re-entry. Q: Can people withdraw money before 60? Yes—under two conditions: Partial withdrawals of up to 25% of your contributions (not including returns) are allowed three times for specific needs like illness or education. A full exit before 60 is possible, but only 20% is paid out, and the remaining 80% must be used to buy an annuity. However, if your total corpus is below ₹ 2.5 lakh, you can withdraw the full amount without annuity obligations. Takeaway: You can open your NPS account in minutes, but the real commitment is to your future self. As Ghosh puts it, 'It's like Hotel California—you can check out, but you can't come back in. So get in when you're ready to commit to lifelong financial dignity.' Watch Episode 3 to learn how to open, operate, and manage your NPS account with ease. First Published: 28 Apr 2025, 06:08 PM IST
