What is Tier 2 NPS?
NPS
Jan 11, 2025
Tata Pension Management started running NPS money in August 2022. Its regular Tier I E, C and G schemes hold about ₹8,400 crore.
In four years, it has produced the best 3-year equity return in NPS. Its bond schemes are below average so far.
At a glance
| Scheme (Tier I) | Assets | 3-year return (rank) | 5-year return (rank) | 10-year return (rank) |
|---|---|---|---|---|
| Scheme E (equity) | ₹4,146 crore | 9.99% (1 of 9) | – | – |
| Scheme C (corporate bonds) | ₹1,866 crore | 7.41% (6 of 9) | – | – |
| Scheme G (government bonds) | ₹2,399 crore | 5.95% (8 of 9) | – | – |
Returns for Tier I as on 18 September 2026; assets from Value Research, October 2026. “–” means the fund has not completed that period.
Scheme E (equity)
| Period | Tata | Benchmark | Average of all funds | Rank |
|---|---|---|---|---|
| 1 year | -3.06% | -3.95% | -5.09% | 3 of 10 |
| 3 years | 9.99% | 8.56% | 8.10% | 1 of 9 |
| Since inception | 11.52% | – | – | – |
Tata’s 3-year return of 9.99% is the best of all ten funds, 1.43 percentage points a year above the benchmark. It also held up better than most over the past year, ranking third at -3.06% against the benchmark’s -3.95%. Since launch, the scheme has returned 11.52% a year.
The portfolio is 96.66% equity, with 2.62% in cash.
The caveat is time. Three years covers roughly one market cycle, and 3-year rankings don’t reliably predict 10-year ones: HDFC ranks fifth over 3 years but first over 10.
Scheme C (corporate bonds)
| Period | Tata | Benchmark | Average of all funds | Rank |
|---|---|---|---|---|
| 1 year | 4.89% | 4.90% | 5.26% | 8 of 10 |
| 3 years | 7.41% | 7.05% | 7.50% | 6 of 9 |
| Since inception | 6.99% | – | – | – |
The corporate bond scheme ranks sixth of nine over 3 years and eighth of ten over 1 year. It beat the benchmark over 3 years and came within 0.01 points of it over 1. The portfolio is 76.23% AAA-rated and 14.79% AA-rated, with 6.92% in cash.
Scheme G (government bonds)
| Period | Tata | Benchmark | Average of all funds | Rank |
|---|---|---|---|---|
| 1 year | 2.58% | 3.43% | 2.93% | 10 of 10 |
| 3 years | 5.95% | 6.75% | 6.25% | 8 of 9 |
| Since inception | 6.47% | – | – | – |
Government bonds are Tata’s weakest scheme so far. It ranks last over 1 year and eighth of nine over 3 years, below the benchmark on both.
The portfolio is 94.97% sovereign but concentrated: its largest holding, a 6.90% government bond maturing in 2065, is 19.25% of the fund. That is the second-highest single-bond weight among the ten.
MSF schemes
| Scheme (as listed by NPS Trust) | Equity range | Assets (₹ crore) |
|---|---|---|
| Smart Retirement – I | 70%-100% | 24.95 |
NPS Trust, as on 30 September 2026.
Smart Retirement holds 70% to 100% in equity and has ₹25 crore. See the MSF comparison.
Fees
From 1 April 2026, the investment management fee on regular non-government NPS schemes is slab-based: 0.12% a year on the first ₹25,000 crore of assets, then 0.08%, 0.06% and 0.04% on higher slabs. MSF schemes can charge up to 0.30%.
Verdict
- Scheme E: the best 3-year record in NPS, but only three years of it.
- Scheme C: lower half.
- Scheme G: among the weakest so far.
- Active choice: a candidate for Scheme E if you accept a short track record. Pair it with a fund with a longer bond record for C and G. You can hold up to three pension funds, one per asset class.
- Auto choice: the weak government bond record matters more as you age and Scheme G grows.
Compare it with the rest in the Scheme E, Scheme C and Scheme G comparisons.
Sources: returns for Tier I as on 18 September 2026, NPS Trust data as published by HDFC Securities. Net assets and portfolios: Value Research, October 2026. MSF schemes: NPS Trust. Fees: PFRDA. Past returns do not guarantee future returns.
