The Pension Fund Regulatory and Development Authority has introduced new investment choices for National Pension System
and Unified Pension Scheme subscribers. Two new auto choice options are now available for central government employees.
These additions increase the total investment choices to six. Subscribers can now select from a wider range of
investment strategies to manage their retirement funds.
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Pension Fund Regulatory and Development Authority (PFRDA) has expanded the choice of investment options available under
National Pension System (NPS) and Unified Pension Scheme (UPS). The regulator has now introduced two new Auto Choice
options, taking the total number of investment choices for central government (CG) subscribers to six. The new auto
choice investment options are- Auto Choice -Life Cycle 75-High (15E/55Y) and Auto choice -Life Cycle- Aggressive
Existing NPS, UPS investment choices for central government subscribers
The existing 4 investment choices for NPS and UPS central government subscribers are as follows-
Default Scheme: Contributions are invested as per the predefined asset allocation pattern managed by three pension
Active Choice (100% G-Sec): Investment solely in government securities.
Auto Choice - Life Cycle 25 - Low (5E/55Y): The subscriber’s contribution is invested with the equity exposure of 25%
until they reach 35 years of age and the equity allocation tapers subsequently till it reaches 5% at the age of 55
years, which continues till exit.
Auto Choice – Life Cycle 50- Moderate (10E/55Y): The subscriber’s contribution is invested with the equity exposure of
50% until they reach 35 years and the equity allocation tapers subsequently till it reaches 10% at the age of 55 years,
which continues till exit.
Also read: Pensioner alert: Why is central govt instructing banks to send monthly pension slip to every pensioner?
New investment choices for NPS, UPS central government subscribers
PFRDA has introduced the following additional auto choice investment options:
Auto Choice – Life Cycle 75 (High):
Equity exposure of 75% until age 35, gradually reducing to 15% by age 55. This option is designed for subscribers
comfortable with higher market-linked volatility in exchange for potentially higher long-term returns.
Auto Choice – Life Cycle – Aggressive:
Equity allocation of 50% until age 45, tapering to 35% by age 55. The higher equity floor differentiates it from
existing options and caters to subscribers seeking growth-oriented portfolios even into their mid-career.
Subscribers choosing any plan other than the default scheme must:
Select one of the 5 non-default investment options now available, and
Choose one pension fund from the 10 PFs registered with PFRDA
The regulator has advised subscribers to review scheme performance and pension fund track records before opting for a
shift. Updated data on scheme-wise and fund-wise returns is available on the NPS Trust website.
As per PFRDA’s investment guidelines, the following exposure limits are set for the government sector
Government securities & related investments: Up to 65%
Debt instruments & related investments: Up to 45%
Short-term debt instruments & related investments: Up to 10%
Equity & related investments: Up to 25%
Asset-backed, trust structured & miscellaneous investments: Up to 5%
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