The National Pension System (NPS) is a voluntary, defined contribution retirement savings plan created to help members make the best choices for their future via methodical saving throughout their working lives. The NPS aims to help persons develop the habit of saving for their retirement.

# Pension Fund Manager(PFM) 

The subscriber has to choose one from the following PFMs:-

1.  Aditya Birla Sunlife Pension Management Limited
2. HDFC Pension Management Company Limited
3. ICICI Prudential Pension Funds Management Company Limited
4. Kotak Mahindra Pension Fund Limited
5. LIC Pension Fund Limited
6. Reliance Capital Pension Fund Limited
7. SBI Pension Funds Private Limited
8. UTI Retirement Solutions Limited
9. Tata Pension Management Limited
10. Axis Pension Fund Management Limited
11. Max Life Pension Fund Management Limited

# Asset Classes

There are 3 Asset Classes under which the funds are allocated-

‌1. Equity and Asset Classes - Asset Class E

‌2. Corporate Debt - Asset Class C

‌3. Government Bonds - Asset Class G



# Modes of Investment in NPS 

The subscriber has to choose between one of Active or Auto investment options. 

Active :- Here, the subscriber has maximum control of how his/her funds are being allocated. The subscriber has to provide the Pension Fund Manager(PFM) and the asset class as well as the percentage allocation. 

Auto :- Under this, the subscribers don't have to make any asset allocation decisions. The investments are made under one of the following three available Life Cycle Funds. 

LC 25 :- Conservative Life Cycle Fund. It has a 25% cap on the Class E allocation which keeps tapering as the subscriber ages. 

LC 50 :- Moderate Life Cycle Fund. It has a 50% cap on the Class E allocation which further reduces year on year. 

LC 75 :- Aggressive Life Cycle Fund. It has a 75% cap on the Class E allocation which keeps decreasing. 

# Choosing the right allocation

Here are some guidelines to assist you in choosing the appropriate asset allocation strategy for your NPS savings:

‌You can and should be aggressive with your retirement savings if you are young, in your 30s or early 40s (unless you are a conservative saver). As a result, equities should account for a large portion of your investment portfolio.
‌If you are in your mid-40s or older and already have a significant allocation to debt savings (via EPF and PPF), you can have NPS with a high equity allocation (as high as permitted), so that your overall retirement portfolio has a reasonable equity allocation. However, if your PF corpus is small and you have a lot of money in equity funds, you can be conservative with NPS and treat it as part  of the debt side of your retirement corpus.

These are broad approaches. Because everyone has different needs, the actual approach will be different for everyone.

# How can PensionBox help? 

[PensionBox](https://pensionbox.in) not only helps you track your investments, but allows you to flexibly invest in NPS, NPS Subscribers gets exclusive tax benefits for investment up to Rs. 50,000 in (Tier I account) under subsection 80CCD (1B). This is over and above the deduction of Rs. 1.5 lakh available under section 80C of Income Tax Act.

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The National Pension System (NPS) is a voluntary, defined contribution retirement savings plan created to help members make the best choices for their future via methodical saving throughout their working lives. The NPS aims to help persons develop the habit of saving for their retirement.

Picking Asset Allocation for Your NPS Investments

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