{"id":8207,"date":"2026-10-26T12:36:36","date_gmt":"2026-10-26T07:06:36","guid":{"rendered":"https:\/\/1finance.co.in\/1f-dashboard\/?post_type=blog&p=8207"},"modified":"2026-10-26T15:59:40","modified_gmt":"2026-10-26T10:29:40","slug":"lic-pension-fund-nps-review","status":"publish","type":"blog","link":"https:\/\/1finance.co.in\/1f-dashboard\/blog\/lic-pension-fund-nps-review\/","title":{"rendered":"LIC Pension Fund NPS review: returns, portfolio and fees (2026)"},"content":{"rendered":"

LIC Pension Fund runs one of the most conservative books in NPS. Its regular Tier I E, C and G schemes hold about \u20b921,400 crore, with the largest share in government bonds.<\/p>\n

That caution shows in the results. LIC has the best long-term government bond record in NPS, a below-average equity record, and a safe but low-returning corporate bond scheme.<\/p>\n

At a glance<\/h2>\n\n\n\n\n\n\n\n
Scheme (Tier I)<\/th>\nAssets<\/th>\n3-year return (rank)<\/th>\n5-year return (rank)<\/th>\n10-year return (rank)<\/th>\n<\/tr>\n<\/thead>\n
Scheme E (equity)<\/td>\n\u20b97,418 crore<\/td>\n7.09% (7 of 9)<\/td>\n8.05% (6 of 7)<\/td>\n10.85% (5 of 6)<\/td>\n<\/tr>\n
Scheme C (corporate bonds)<\/td>\n\u20b94,655 crore<\/td>\n7.23% (9 of 9)<\/td>\n6.20% (7 of 7)<\/td>\n7.42% (4 of 6)<\/td>\n<\/tr>\n
Scheme G (government bonds)<\/td>\n\u20b99,370 crore<\/td>\n6.46% (2 of 9 (tied))<\/td>\n5.81% (3 of 7)<\/td>\n7.63% (1 of 6)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Returns for Tier I as on 18 September 2026; assets from Value Research, October 2026. Rank is among funds with a record for that period.<\/em><\/p>\n

Scheme G (government bonds)<\/h2>\n\n\n\n\n\n\n\n\n\n\n
Period<\/th>\nLIC<\/th>\nBenchmark<\/th>\nAverage of all funds<\/th>\nRank<\/th>\n<\/tr>\n<\/thead>\n
1 year<\/td>\n3.14%<\/td>\n3.43%<\/td>\n2.93%<\/td>\n2 of 10 (tied)<\/td>\n<\/tr>\n
3 years<\/td>\n6.46%<\/td>\n6.75%<\/td>\n6.25%<\/td>\n2 of 9 (tied)<\/td>\n<\/tr>\n
5 years<\/td>\n5.81%<\/td>\n5.90%<\/td>\n5.73%<\/td>\n3 of 7<\/td>\n<\/tr>\n
7 years<\/td>\n6.68%<\/td>\n6.41%<\/td>\n6.55%<\/td>\n2 of 7<\/td>\n<\/tr>\n
10 years<\/td>\n7.63%<\/td>\n6.86%<\/td>\n7.07%<\/td>\n1 of 6<\/td>\n<\/tr>\n
Since inception<\/td>\n9.05%<\/td>\n\u2013<\/td>\n\u2013<\/td>\n\u2013<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

This is LIC’s standout scheme. Its 10-year return of 7.63% is the best of all ten funds, 0.54 percentage points ahead of SBI in second place. Over 10 years, \u20b91 lakh grew to about \u20b92.09 lakh. Since inception in 2013, the scheme has returned 9.05% a year, also the highest.<\/p>\n

It ranks second over 7 years and joint second over 3 years. The portfolio is the most sovereign of the ten, at 96.51%. It is also the least concentrated: the largest holding, a 7.34% government bond maturing in 2064, is 8.19% of the fund.<\/p>\n

Scheme E (equity)<\/h2>\n\n\n\n\n\n\n\n\n\n\n
Period<\/th>\nLIC<\/th>\nBenchmark<\/th>\nAverage of all funds<\/th>\nRank<\/th>\n<\/tr>\n<\/thead>\n
1 year<\/td>\n-6.04%<\/td>\n-3.95%<\/td>\n-5.09%<\/td>\n6 of 10 (tied)<\/td>\n<\/tr>\n
3 years<\/td>\n7.09%<\/td>\n8.56%<\/td>\n8.10%<\/td>\n7 of 9<\/td>\n<\/tr>\n
5 years<\/td>\n8.05%<\/td>\n8.76%<\/td>\n8.44%<\/td>\n6 of 7<\/td>\n<\/tr>\n
7 years<\/td>\n13.09%<\/td>\n14.05%<\/td>\n13.42%<\/td>\n6 of 7<\/td>\n<\/tr>\n
10 years<\/td>\n10.85%<\/td>\n12.37%<\/td>\n11.55%<\/td>\n5 of 6<\/td>\n<\/tr>\n
Since inception<\/td>\n11.75%<\/td>\n\u2013<\/td>\n\u2013<\/td>\n\u2013<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

LIC’s equity record is below average. It ranks seventh of nine over 3 years, sixth of seven over 5 and 7 years, and fifth of six over 10 years. Its 10-year return of 10.85% is 1.52 percentage points a year below the benchmark.<\/p>\n

The portfolio is close to fully invested, at 98.34% equity. Its top holdings are ICICI Bank (6.96%), HDFC Bank (6.03%), Reliance Industries (5.06%), State Bank of India (4.29%), Bharti Airtel (4.24%) and Larsen & Toubro (4.05%). Financial stocks are 31.76% of the portfolio, and energy and utilities 12.57%.<\/p>\n

Scheme C (corporate bonds)<\/h2>\n\n\n\n\n\n\n\n\n\n\n
Period<\/th>\nLIC<\/th>\nBenchmark<\/th>\nAverage of all funds<\/th>\nRank<\/th>\n<\/tr>\n<\/thead>\n
1 year<\/td>\n4.88%<\/td>\n4.90%<\/td>\n5.26%<\/td>\n9 of 10<\/td>\n<\/tr>\n
3 years<\/td>\n7.23%<\/td>\n7.05%<\/td>\n7.50%<\/td>\n9 of 9<\/td>\n<\/tr>\n
5 years<\/td>\n6.20%<\/td>\n6.19%<\/td>\n6.43%<\/td>\n7 of 7<\/td>\n<\/tr>\n
7 years<\/td>\n7.24%<\/td>\n7.48%<\/td>\n7.33%<\/td>\n6 of 7<\/td>\n<\/tr>\n
10 years<\/td>\n7.42%<\/td>\n7.59%<\/td>\n7.52%<\/td>\n4 of 6<\/td>\n<\/tr>\n
Since inception<\/td>\n8.65%<\/td>\n\u2013<\/td>\n\u2013<\/td>\n\u2013<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

LIC holds one of the safest corporate bond portfolios: 86.43% AAA-rated and only 8.67% AA-rated. Only Aditya Birla Sun Life has a higher AAA share. Its largest holdings are bonds of public-sector issuers such as HUDCO, NHPC, the National Highways Authority and Power Grid.<\/p>\n

The trade-off is return. LIC ranks last of nine over 3 years and last of seven over 5 years. Over 10 years it does better, fourth of six, but still below the benchmark.<\/p>\n

MSF schemes<\/h2>\n\n\n\n\n\n\n
Scheme (as listed by NPS Trust)<\/th>\nEquity range<\/th>\nAssets (\u20b9 crore)<\/th>\n<\/tr>\n<\/thead>\n
Growth Plus – Tier I<\/td>\n0%-100%<\/td>\n13.62<\/td>\n<\/tr>\n
Smart Balance – Tier I<\/td>\n65%-85%<\/td>\n11.70<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

NPS Trust, as on 30 September 2026.<\/em><\/p>\n

Growth Plus can hold anything from 0% to 100% in equity. Smart Balance is a balanced scheme with 65% to 85%. Together they hold \u20b925 crore. See the MSF comparison<\/a>.<\/p>\n

Fees<\/h2>\n

From 1 April 2026, the investment management fee on regular non-government NPS schemes is slab-based: 0.12% a year on the first \u20b925,000 crore of assets, then 0.08%, 0.06% and 0.04% on higher slabs. MSF schemes can charge up to 0.30%.<\/p>\n

Verdict<\/h2>\n