Tensai Sensei

Employer NPS has become increasingly attractive, especially under the New Tax Regime. In fact, the employer's NPS contribution under Section 80CCD (2) is one of the few meaningful tax deductions still available. Because of this, many employees may be tempted to move their existing NPS accounts to the Corporate Sector model. While the tax benefits are undoubtedly attractive, there are several operational changes and lesser-known implications that are rarely discussed. None of these are deal-breakers, but they're worth understanding before making the switch. Here are some things I discovered along the way. 🎯 PFM & Asset Allocation Lock-In Under Corporate NPS, the employer may choose the Pension Fund Manager (PFM) and asset allocation on the behalf its employees. The problem? One size doesn't fit all. You might be a young investor with a long investment horizon and a high risk appetite. Yet your employer may select a conservative scheme with lower equity exposure. Over de...

In one of my other articles, I discussed some of the lesser-known changes that come with moving from an All Citizen NPS account to Corporate NPS. One of those changes is the possibility of being moved to a different Central Recordkeeping Agency (CRA). When I enrolled in my employer's NPS program, my NPS account was migrated from Protean CRA (formerly NSDL CRA) to KFintech CRA. At that point, I had already been investing in NPS for nearly 6 years and had become quite familiar with the ecosystem. Unfortunately, my experience with the migration and the new CRA has been far from smooth. Support Process That Creates More Work The first thing I noticed was the support experience. Creating and tracking grievances is unnecessarily complicated. The portal itself is difficult to navigate and often behaves unpredictably. Attachments uploaded while raising grievances don't appear when tracking the issue later. Even more frustrating was the quality of responses. Whether through email, phone...

This is the 4th article in my  NPS series . In this one, I’m sharing some ideas to make NPS even more investor-friendly. 1️⃣ 100% Equity Allocation As a young investor, I’d like the option to allocate my entire corpus to equity until I’m 5 years away from retirement. 2️⃣ Beyond the Top 200 Companies Fund managers should have the flexibility to invest beyond the top 200 Indian companies. In my younger years, I’m comfortable with higher risk and would love exposure to smallcaps and even microcaps. 3️⃣ Global & Commodity Exposure NPS should offer options to invest in commodities like gold & silver, and also in global markets - US, China, Brazil, and other emerging territories. 4️⃣ Higher Allocation to Scheme A The current 5% cap on Scheme A feels restrictive. Subscribers should be allowed to allocate a higher portion here. 5️⃣ Flexible Annuity Options Subscribers should be able to choose more than one annuity...

When planning for retirement, every rupee matters. Maximizing your retirement corpus isn't just about returns, it's also about minimizing tax impact. Choosing the right investment vehicle for retirement can significantly improve your post-retirement income. After publishing my last article on How to Use NPS Tier II Account for Higher Returns & Greater Flexibility ,  one question kept popping up: If the goal is to purchase an annuity at retirement, why not just build the corpus using mutual funds and then buy the annuity? 💡 Here's why I believe NPS is a smarter choice over mutual funds for this purpose 👇 🔁 1. No Tax on Rebalancing With NPS, I can change: My Pension Fund Manager ✅ My asset allocation ✅ My investment style ✅ …without paying any capital gains tax ! That means I can gradually shift from equity to debt as I near retirement, without losing money to taxes . 👉 Try doing this in mutual funds, and you’ll be hit with tax at every switch! 🛡️ 2. EEE Structure ...

NPS is Misunderstood The National Pension System (NPS) is often misunderstood. Unlike other investment vehicles, NPS is specifically designed for retirement planning . Every feature of this product is geared toward long-term investing , making it fundamentally different from conventional investment options. Financial security is a basic human need. For those earning a salaried income, receiving a monthly paycheck provides a sense of stability. Naturally, we want to maintain the same sense of security even after retirement. One of the best ways to generate a steady post-retirement income is through an annuity . An annuity works by investing a lump sum amount, which then provides a fixed income at predefined intervals — in this case, monthly payments. Importance of Annuities Scientific research has proven that humans are not biologically wired to make complex decisions repeatedly. Our brains tend to rely on shortcuts, which can often lead to poor decision-making . Emotions like f...

Introduction The National Pension System is a great financial product for creating your retirement kitty. With contribution of just ₹5000 per month, you can accumulate more than a crore! I am a NPS subscriber (through NSDL eNPS) myself. If you have read my previous post  regarding EPF you know I like NPS for the following reasons. 60 year lock-in period Additional tax exemption under section 80CCD (1B) Choice of various assets classes Choice of pension fund managers Option to change your asset allocation or pension fund manager Low cost of fund management Transparency & organization structure Good customer support Online account opening and management Multiple exit options at retirement Screenshot from  Pension Calculator | NPS Trust Some Not So Great Things NPS is...