National Pension System: The latest data from PFRDA shows that the average annual returns on National Pension System (NPS) funds invested in equity schemes dropped to 26.6% as of November 30, due to the recent decline in benchmark equity indices in October—November 2024. This is a significant decrease from the nearly 40% return recorded on September 28 and the 30% return on November 10.
The total Assets Under Management (AUM) for NPS increased slightly to reach Rs 13.55 lakh crore as of November 30, up from Rs 13.46 lakh crore on November 10. According to official data, NPS assets saw a strong growth of 28.26 percent on a year-on-year basis as of November 30. As of the end of September, overall NPS assets were at Rs 13.40 lakh crore, showing a 32 percent increase on a year-on-year basis.
While the average annual returns for equity schemes have decreased since the end of September, they still remain significantly higher than those of the central government scheme (12.55%) and the State government scheme (12.63%). The average return for Pension Funds under the Atal Pension Yojana over the past year was 12.65%, surpassing the overall return of 9.18% since its inception.
The fall in both Sensex and Nifty50 by over 8% from their peak in September 2024 has caused concern among investors. Nifty50 reached a record high of 26,277.35 on September 27, while Sensex hit a peak of 85,978 on the same day. Since then, Nifty50 has experienced a sharp decline of 2150 points, reflecting an 8% drop, mainly driven by lacklustre Q2 corporate earnings and a record FPI pullout due to the ‘Trump Trade’ amidst rising US yields.
In October 2024, Nifty50 experienced a significant decline, closing in the deep red with a decrease of 6.2 percent. This marked the worst monthly performance for Nifty50 since the initial impact of Covid-19 in March 2020. Similarly, BSE Sensex also saw a decline of 5.83 percent in October 2024.
Private AUM vs Corporate AUM
According to the latest data from the PFRDA, there was a slight moderation in the growth of NPS assets in the private sector, which increased by 37.67 percent to Rs 2.71 lakh crore as of November 30. This is a moderate increase compared to the growth of 44.52 percent in assets recorded at Rs 2.70 lakh crore as of end October on a year-on-year basis.
NPS assets in the government sector (Centre and State government) reached Rs 10.37 lakh crore by the end of November 30, surpassing the AUM of Rs 10.23 lakh crore as of September 2024.
In comparison, AUM in the corporate sector NPS showed strong growth, reaching Rs 2.02 lakh crore as of November 30, compared to Rs 1.46 lakh crore as of December 2 last year.
Furthermore, the number of NPS subscribers in the private sector also displayed impressive growth, with a year-on-year rise of 21.51 percent to 61.20 lakh. The private sector’s NPS assets growth of 37 percent has surpassed the government sector’s growth of 27 percent year-on-year, even though the government sector was operating on a much higher base.
The ‘All Citizen Model’, which primarily caters to individuals, held assets totaling Rs 68,795 crore. There were 21.92 lakh subscribers in the corporate sector, consisting of employees of companies enrolled in the NPS, while the ‘All Citizen Model’ had 39.28 lakh subscribers.