Performance Evaluation of Corporate Debt (Tier-I) Scheme of National Pension System

National Pension System was introduced by Government of India for all its recruits in Central Government Services on or after 1st January, 2004 except for armed forces. The new system was launched on the basis of OASIS report. The earlier system was unaffordable and was limited mainly for the civil servants. Another major old age social security scheme run by EPFO mainly covers the workers of organized sector. In-spite of these merely 15 percent workers were covered by old age social security schemes. Hence, majority of workforce was left behind the coverage of old age social security. These workers are mainly unorganized workers. The NPS was launched to cover this workforce under old age social security scheme and to reduce the financial burden of the government on earlier Defined Benefit Scheme for civil servants. The new scheme was based upon the Defined Contributory System in which both employer and employee contribute a fixed amount for old age social security. A subscriber can open two types of account under NPS namely Tier-I and Tier-II account. Various models of NPS namely “Central Government Model”, “State Government Model”, “All Citizen Model”, “Corporate Model”, “Swavalamban Scheme (NPS-Lite)” and Atal Pension Yojna were launched to provide the old age social security to the entire workforce. In the present study the Corporate Debt (Tier-I) Scheme offered under “All Citizen Model” of NPS has been studied. Daily NAVs of seven PFMs running the scheme were taken for the analysis of the scheme. Beta Coefficient, Coefficient of Variation, Coefficient of Determination, Jensen's Alpha, Treynor's Index, Sharpe Ratio and Two-Way ANOVA were also used for the analysis of the data. LIC PF was found as the best performer under the scheme followed by ICICI PF and HDFC PF.