If you are investing in a National Pension System (NPS), choosing the right fund manager is essential for creating long-term wealth. Performance can vary significantly with multiple pension fund managers (PFMs) managing their Tier I equity plans. This is a detailed view Top 3 NPS Fund Managers of 2025 Based on consistent returns for 1, 3, 5, 7, and 10 years.
Investors can read it too How to Maximize Returns from a Systematic Retreat Plan (SWP).
What is NPS (National Pension System)?
The National Pension System (NPS) is a government-supported pension system designed to provide financial security to individuals after retirement. This allows individuals to invest in a variety of asset classes, including stocks, corporate bonds, and government securities. The NPS is open to all Indian citizens, whether they are pay and self-employed, providing the opportunity to accumulate retirement corpus while reaping tax benefits.
How does NP work?
NPS works by allowing investors to contribute regularly to pension accounts and is then managed by professional fund managers. Contributions are invested in a variety of asset classes based on the investor’s selection or default options. NPS offers two types of accounts.
- Tier I Account: This is a required account for all NPS investors. It is intended for long term retirement savings and comes with certain withdrawal restrictions.
- Tier II account: This is a voluntary account that allows investors to withdraw funds at any time and provide more flexibility.
Investors can select a fund manager from a list of certified NPS fund managers, and the funds will be invested according to the selected asset allocation (stock, government bond, or corporate bond).
Why consistency is important in NPS fund performance
NPS is a retirement-centric product, with long-term performance playing a key role. Fund managers deliver stable and consistent returns across different market cycles are more reliable than those who run sporadically. Here is an example 30 mutual funds that tripled investors’ money in five years. For this reason, we evaluated fund managers with return data spanning up to 10 years.
Top NPS Fund Managers Based on Performance in 2025
Based on data up to April 13th, 2025, we will introduce the top NPS Fund Managers.
1) Kotak Pension Fund
The Kotak Pension Fund outperforms many of its peers in all time frames. It consistently offers strong returns and has become a reliable option for long term retirement plans.
- 1 year return: 2.45%
- 3 Year Returns: 12.47%
- 5-year return: 22.80%
- 7 years return: 13.27%
- 10 years return: 11.62%
This consistent performance over the long term reflects Kotak’s strong stock management strategy. This is suitable for investors looking for long-term capital growth in their NPS portfolio.
2) UTI Pension Fund
The UTI Pension Fund is one of the top performance fund managers under NPS Tier I Equity Plans.
- 1 year return: 1.70%
- 3 Year Returns: 12.69%
- 5-year return: 22.83%
- 7 years return: 13.08%
- 10 years return: 11.62%
With almost the same return as Kotak in the long run, UTI is a great alternative for consistent growth. It stands out for maintaining stability throughout the various market cycles.
3) HDFC Pension Fund
The HDFC Pension Fund has steadily increased its ranks thanks to its reliable performance.
- 1 year return: 0.49%
- 3 Year Returns: 11.01%
- 5-year return: 21.61%
- 7 years return: 13.14%
- 10 years return: 11.62%
The short-term returns are slightly lower than the top two, but their long-term consistency makes them a strong competitor in the NPS space.
Other prominent NPS fund managers
ICICI Prudential Pension Fund
- 1 year return: -0.01%
- 3 Year Returns: 11.92%
- 5-year return: 22.75%
- 7 years return: 13.25%
- 10 years return: 11.36%
ICICI shows long-term returns, but is slightly behind performance over the last year.
LIC Pension Fund
- 1 year return: -0.59%
- 3 Year Returns: 10.85%
- 5-year return: 22.36%
- 7 years return: 12.19%
- 10 years return: 10.51%
They have a solid decade return, but their performance has been weak these days.
Tax benefits of investing in NPS
One of the main advantages of investing in a National Pension System (NPS) is the tax benefits it offers. Let’s break down the latest provisions under the Post-Budget Income Tax Act, and highlight that it is permitted under the old and new tax systems.
NPS tax benefits per section
| section | Deduction limit | Applies to | It is permitted |
|---|---|---|---|
| 80ccd (1) | Up to 1.5 lakh (part of 80c/80cce Combined Cap) | Salary (10% of salary), self-employed (20% of total income) |  Old system
|
| 80ccd (1b) | Additional £50,000 (over 80c limit) | All individuals who contribute to NP | Old system
|
| 80ccd (2) | Up to 14% of salary (government employee), 10% (private); Budget 2025 Private Limit increased to 14% | Employer’s contribution to NPs to pay individuals | Old system
|
New systemWho should invest in NPs?
The National Pension System (NPS) is a powerful tool for long term retirement planning. Perfect for individuals seeking stable returns, government surveillance and tax benefits (under the old regime). Here’s what you should consider investing:
1. Taxpayers under the old government
The NPS continues to offer significant tax incentives under the old tax system.
- 1.5 lakh deductions for less than 80ccd (1) (part of 80c)
- Additional £50,000 deduction based on 80ccd (1b)
- Employer contributions (up to 14% of salary) can be deducted for less than 80ccd (2), even under the new structure.
Note: Tax systems based on 80ccd (1) and 80ccd (1b) are not available if you choose the new tax system (except 80ccd (2)).
2. Long-term low-cost investors
If you’re looking for a low-cost, regulatory, and discipline saving plan for your retirement, the NPS is perfectly suited. You are committed over the long term, and partial withdrawals are only permitted under certain conditions, encouraging savings. However, if you are looking for a high return, you can go to some of these Mutual funds for long-term investments in 2025.
3. Parents plan for their children
With the introduction of the NPS Vatsalya scheme in Budget 2025, parents can now open NPS accounts for their minor children. Contributions made are eligible for tax deductions of less than 80ccd (1b), making them a sensible way to plan future retirements for children and reduce their current tax liability.
4. Late career experts planning to retire
Even people in their 40s and 50s can benefit from NPs and complement other retirement investments. Proper allocations and regular contributions to equity can greatly strengthen your retirement corpus.
Conclusion: If you’re looking for the best stock plans for NPS in 2025, the Kotak Pension Fund, UTI Pension Fund and HDFC Pension Fund are the top three performers offering consistency across multiple time frames. These funds demonstrate their ability to navigate market volatility while providing long-term returns, making them ideal for your retirement portfolio. Always assess your risk appetite and retirement goals before choosing PFM. With such consistent performers, NPS investments are more likely to grow steadily over time.
FAQ
- How many pension fund managers do NPS Tier I equity plans have?
Currently, there are 11 PFMs that manage your NPS Tier I equity plan. - Can I switch fund managers under NPS?
Yes, NPS allows subscribers to switch fund managers once per fiscal year. - Is it better to select Active or Auto Select on NPS?
If you are confident in choosing a fund manager and asset allocation, active choices are better. Otherwise, autoselect provides an automatic lifecycle-based allocation. - How can I evaluate which PFM is best for me?
Find consistent long-term returns, fund sizes, and performance across multiple time frames. Also, check the experience and reliability of your fund manager. - Is NPS guaranteed returns?
no. In particular, in stock plans, NPS returns are market-related and not guaranteed.
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