MUMBAI: PPFAS Asset Management Pvt. Ltd received approval from the Pension Fund Regulatory and Development Authority (PFRDA) on Wednesday to become a sponsor for a pension fund under the National Pension System (NPS).
The company will soon begin managing the retirement savings of individuals investing through NPS. To facilitate this, it will establish a separate pension fund company that will operate the schemes and aim to grow these savings over the long term.
Commenting on the development, Neil Parag Parikh, chairman and chief executive of PPFAS Asset Management, said, “Managing retirement savings is a significant responsibility, and we are committed to handling it with care, discipline, and a long-term approach. Our focus will remain on safeguarding investors’ interests while delivering consistent performance.”
The company will now complete the necessary formalities, including registration and operational setup of the pension fund, before commencing full-scale operations.
Parikh noted that recent changes in the NPS framework have made this space increasingly attractive for launching new products. While both mutual funds (MFs) and NPS play important roles in investors’ portfolios, they serve different financial objectives. He told Mint that NPS is primarily designed for disciplined, long-term retirement savings, whereas mutual funds offer greater flexibility and can be used for wealth creation, liquidity management, and a variety of other financial goals.
He also highlighted the tax advantages of NPS. “At maturity, up to 60% of the corpus can be withdrawn tax-free, making it a more tax-efficient option for retirement planning. Mutual funds, on the other hand, are subject to long-term capital gains (LTCG) tax upon withdrawal,” Parikh said.
Other notable features of NPS include a lower cost structure compared with mutual funds, which can meaningfully enhance long-term compounding, a lock-in period that reinforces retirement discipline, and a requirement to use a portion of the corpus to purchase an annuity, providing a predictable income stream post-retirement, he added.
Currently, ten asset management companies operate NPS – Aditya Birla Sun Life Asset Management Co., Axis Asset Management Co., DSP Asset Managers, HDFC Asset Management Co., ICICI Prudential Asset Management Co., Kotak Asset Management Co., LIC Asset Management Co., SBI Funds Management, Tata Asset Management Co., and UTI Asset Management Co.
PPFAS Asset Management reported average assets under management of ₹1.5 trillion between January and March 2026.
Parikh added that the company’s core investment approach remains unchanged, with a continued focus on protecting against downside risk while delivering reasonable long-term returns.