PFRDA launches NPS PRIDE-Disha: How the new tool helps you choose the right pension fund

The Pension Fund Regulatory and Development Authority (PFRDA) has launched NPS PRIDE-Disha, a digital decision-support tool that enables National Pension System (NPS) subscribers to compare the historical performance of pension funds in a way that better reflects how most investors actually contribute to their retirement corpus.

Unlike the existing method of comparing point-to-point returns over one, three, five or 10 years, the new tool uses the extended internal rate of return (XIRR) methodology to estimate returns based on periodic contributions, similar to the way subscribers invest through regular monthly deposits.

PFRDA has also directed all Central Recordkeeping Agencies (CRAs) to make the tool available through subscriber login portals and nodal office interfaces during the pension fund selection or switching process.

Why has PFRDA launched NPS PRIDE-Disha?

Until now, NPS subscribers largely compared pension funds using point-to-point returns of individual asset classes such as Equity (E), Corporate Bonds (C) and Government Securities (G). However, PFRDA said such returns only provide a snapshot and may not accurately reflect the experience of subscribers who invest regularly over several years through monthly contributions.

The new platform instead uses the Extended Internal Rate of Return (XIRR) methodology, which measures returns on periodic investments. This allows subscribers to compare how their retirement corpus would have accumulated under different pension funds and investment choices based on actual historical performance.

PFRDA has clarified that the tool is not a return prediction platform and does not provide future projections or assumptions-based estimates.

What can NPS subscribers do with the new tool?

NPS PRIDE-Disha is built using historical scheme-wise NAV data dating back to 2008, covering nearly 5,000 days of daily NAVs across pension funds. According to PFRDA, the platform currently offers nearly 4,800 investment combinations using more than 1.10 lakh NAV data points.

Subscribers can use the platform to:

• Compare pension funds using XIRR based on regular contributions.
• Evaluate historical performance based on age, investment start date, contribution amount and investment choice.
• Compare Active Choice, Auto Choice and Composite Scheme options.
• Simulate how retirement savings would have accumulated under different pension funds.
• View performance comparisons through simple bar graphs.

The regulator has advised CRAs to make the tool available through subscriber login portals and nodal office interfaces during pension fund selection or switching. It has also asked government nodal offices and Points of Presence (PoPs) to promote the platform among subscribers.

Looking ahead, PFRDA said future versions of PRIDE-Disha are expected to include comparisons for Tier II accounts, NPS Vatsalya schemes, Minimum Assured Schemes (MSF), rolling returns and trailing returns, along with additional investment comparison features