NPS assured return scheme likely to offer modest return, go equity-heavy

For a long-term goal like retirement, NPS subscribers should ideally opt for an equity-heavy portfolio

Two developments have occurred that will affect National Pension System (NPS) subscribers. One, the Pension Fund Regulatory and Development Authority (PFRDA) will launch an assured return scheme soon. Two, the Rajasthan state government has opted out of NPS and reverted to the old pension scheme.

Option for conservative investors

The PFRDA is obliged to launch an assured-return scheme because the PFRDA Act requires that one such option be provided.

Such a scheme may appeal to some. “Not everyone can deal with the market-linked returns NPS offers. An assured-return scheme may appeal to conservative investors,” says Deepesh Raghaw, founder, PersonalFinancePlan, a