RISK, RETURN, AND OPERATIONAL PRACTICES OF NPS: A STUDY ON THE PERCEPTION OF INVESTORS

Abstract

The National Pension System (NPS) in India is a scheme that facilitates all the citizens of the country to ensure financial security in the future. NPS started its operation on 1st January 2004 for the employees of the central government and subsequently, it expand its operation to the employees of the state government and the general public as well. Since its beginning, the subscribers of the NPS were curious to know about the benefits of their investments in NPS because of the nature of the investment and the practices of NPS funds by the fund managers. The social security of the investors is not completely ensured through NPS in India and investors are not dissatisfied with the overall performance of the NPS (Eronimus, 2015). However, it is needless to mention that, for the better financial security of the investors in the future and to attract more investors, NPS needs to perform satisfactorily. The present paper tries to analyze the perception of investors, particularly teaching personnel of four select higher academic institutions in Assam. Primary data has been collected through a structured questionnaire from 264 respondents concerning three defined dimensions of NPS from the perspective of the age of the respondents. The study reveals that the perception of the university teachers across the three age groups under study is relatively more agreed with the statements ‘FMs are efficiently managing the market risk’, ‘No certainty of continuous growth in return from investment in NPS’, and ‘Reporting practices by NSDL to the subscriber is appreciable’ as compared to the other statements considered in the study. However, the results of the Kruskal-Wallis test indicate that there is no statistical evidence demonstrating a significant difference in the perception of university teachers towards the statements considered in the study under NPS at a 5% level of significance across the three age groups. KEYWORDS: Risk, Return, Operational Practices, Age, Investment