National Pension System (NPS) Gets New Fund Options for CAB Employees

The Central Government has extended two additional investment choices under the National Pension System (NPS) to eligible employees of Central Autonomous Bodies (CABs).

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The decision gives employees more flexibility to choose an investment option that matches their financial goals and risk appetite.

The Department of Expenditure, Ministry of Finance, issued an Office Memorandum announcing that employees covered under the NPS will now have access to the Aggressive Life Cycle Fund (LC-75 High) and the Balanced Life Cycle Fund (BLC).

These options were already available to Central Government employees and have now been extended to Central Autonomous Body employees as well.

Two New Investment Choices Under NPS

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The Aggressive Life Cycle Fund (LC-75 High) is designed for employees who are comfortable with a higher level of investment risk. Under this option, up to 75% of the pension corpus can be invested in equities during the early years of a subscriber’s career.

As the employee grows older, the equity exposure is automatically reduced and more funds are shifted to safer investment instruments such as government securities and debt.

The Balanced Life Cycle Fund (BLC) follows a more moderate approach. It allows an initial equity allocation of up to 50%, which is also reduced gradually with age. This option is aimed at employees who want a balance between growth and stability while planning for retirement.

In both options, the asset allocation changes automatically over time, reducing the need for subscribers to actively manage their investments.

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More Flexibility for Retirement Planning

The government said the move is intended to provide Central Autonomous Body employees with more choices while planning their retirement savings. Employees can now select an investment option based on their personal financial goals and willingness to take investment risks.

By extending these options, the government has brought the pension investment choices available to Central Autonomous Body employees in line with those already offered to Central Government employees under the National Pension System.

The National Pension System is a defined contribution retirement savings scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA).

It covers Central Government employees, employees of participating Central Autonomous Bodies, state government employees, corporate employees, and individual subscribers.

The latest decision is expected to help eligible employees make more informed retirement planning choices while allowing their pension investments to follow an age-based investment strategy without requiring regular manual changes.

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