NPS: Investing in the National Pension System (NPS) has become simpler with the introduction of a new digital tool by the Pension Fund Regulatory and Development Authority (PFRDA) named NPS PRIDE-DISHA. This tool aims to assist individuals in comparing the performance of various pension funds and schemes, enabling them to make well-informed decisions.
NPS PRIDE-DISHA, which stands for Pension Fund Returns for Informed Decisions & Empowerment, offers a more accurate way of evaluating pension funds. Instead of solely relying on 1, 3, 5, or 10-year returns, this tool calculates returns using the XIRR (Extended Internal Rate of Return) based on the daily NAV (Net Asset Value). By doing so, it provides insight into how investments could have grown over time with regular contributions to different pension funds.
Key features of NPS PRIDE-DISHA:
– It provides scheme-wise NAV data from 2008 onwards.
– Users can compare various pension funds and schemes.
– A bar chart illustrates the potential growth of retirement savings under each option.
– Different investment choices like Active Choice, Auto Choice, and Composite Scheme can be compared, aiding in the selection of the most suitable pension fund.
To utilize this tool effectively, individuals should access the NPS PRIDE-DISHA portal on the PFRDA website. They will be required to input their birth month and year, investment commencement date, and monthly investment amount. By comparing up to two different schemes or pension funds, users can visualize the potential size of their retirement fund based on historical performance. This tool serves as a valuable resource for making informed investment decisions for the future.
NPS PRIDE – DISHA is a tool designed for deterministic comparison, utilizing around 5,000 days of historical Net Asset Value (NAV) data from pension funds under NPS, as stated by PFRDA. Unlike the usual return comparisons, NPS PRIDE-DISHA enables members to observe how their retirement funds could have developed under different investment options and pension funds, considering past performance.
Disha makes use of historical NAV data by scheme since 2008 and employs the Extended Internal Rate of Return (XIRR) method to offer a subscriber-focused evaluation of PF performance. Users can assess returns across a specified range of investment combinations for set time frames, based on past NAV data. PFRDA clarified that NPS PRIDE – DISHA does not make any future projections or assumption-based predictions.
This online resource allows for the comparison of close to 4,800 different investment choices based on 110,000 NAV data sets, as per PFRDA.