NPS returns: National Pension System delivers 13% annual returns; 'offers flexibility and choice,' says FM

Finance minister Nirmala Sitharaman on Wednesday hailed the National Pension System (NPS) saying that it has emerged as a high performing and cost effective retirement planning tool, with some of the best returns among global pension products.

Speaking at the NPS Diwas conference in New Delhi, organised by the Pension Fund Regulatory and Development Authority (PFRDA), she said the system’s equity schemes have delivered more than 13% average annual returns since launch. Debt and government securities schemes have also performed well, giving around 9% annually.


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

She added that NPS’s combination of strong returns, low cost and flexibility makes it a key part of retirement planning in India.

The scheme, started by the NDA government in 2004, replaced the older defined-benefit pension model with a defined-contribution system. It was first meant for government employees but has since been opened up to all citizens, including private sector workers and the self-employed.

“NPS transformed retirement planning from a government-sector privilege into a universal tool for financial security,” the minister said.

India’s NPS is also among the cheapest pension management systems in the world, with very low charges. Its portability allows subscribers to keep the same account even if they change jobs, move cities, or shift to self-employment.

Low fees mean more of a subscriber’s money stays invested and grows over time. The system is also regulated, transparent, and allows easy movement of accounts

“Whether there’s a job change, relocation, or transition to self-employment, the pension account remains the same,” Sitharaman explained, adding, “NPS offers flexibility and choice”

Anyone can keep their account active with a minimum yearly deposit of Rs 1,000. There is no requirement to pay monthly, making it useful for gig and informal sector workers as well.

The system was upgraded last year with a new Direct Remittance (D-Remit) facility that gives subscribers same-day Net Asset Value (NAV) for contributions. This ensures they don’t lose potential market gains due to processing delays.

“This eliminates the risk of losing out on potential gains due to processing delays in a rising market,” Sitharaman said.

As India works towards becoming a developed nation by 2047, the finance minister said that pensions will play a vital role in creating a secure society and reducing pressure on younger generations.

“As India moves with purpose toward Viksit Bharat @ 2047, every citizen can envision financial dignity in old age,” she said, adding that pensions strengthen households, support working-age children, and direct long-term savings into national priorities.