Govt pensioners get 2 more investment options: NPS, UPS terms explained
New Delhi, Dec 03 2025
They will be allowed to choose from a broader range of equity exposure levels, says pension funds regulator
The pension funds regulator has announced two more investment choices for central government employees under the National Pension System (NPS) and Unified Pension Scheme (UPS). The Auto Choice options raise the total number of investment models to six, according to the Pension Fund Regulatory and Development Authority (PFRDA).
What has changed
The expansion follows a recent Finance Ministry notification and is aimed at giving government employees greater flexibility to align their pension savings with their risk appetite. With the new options, subscribers can choose from a broader range of equity exposure levels and age-based glide paths.
Two new Auto Choice options
PFRDA has introduced the following life-cycle based options:
1. Auto Choice – Life Cycle 75 (High) (15E/55Y)
Equity exposure of 75 per cent until age 35, tapering to 15 per cent by age 55.
Suitable for subscribers willing to accept higher volatility for potentially stronger long-term growth.
2. Auto Choice – Life Cycle – Aggressive (35E/55Y)
Equity allocation of 50 per cent until age 45, reducing gradually to 35 per cent at age 55.
Provides a higher minimum equity exposure compared with existing options, catering to mid-career savers seeking growth-driven portfolios.
Existing options remain available
Central government pensioners may also choose the following schemes:
Default Scheme: A predefined allocation managed by three pension funds.
Active Choice (100 per cent G-Sec): Full investment in government securities.
Auto Choice – Life Cycle 25 (Low): Equity reduces from 25 per cent at age 35 to 5 per cent by age 55.
Auto Choice – Life Cycle 50 (Moderate): Equity reduces from 50 per cent at age 35 to 10 per cent by age 55.
What subscribers must do
Anyone selecting an option other than the default must:
Pick one of the five non-default choices, and
Choose one pension fund from the ten registered with PFRDA.
PFRDA has advised subscribers to review scheme performance and fund track records before shifting. Updated data is available on the NPS Trust website.
Default scheme allocation limits
Under the default model, investments follow caps set by PFRDA:
Government securities: up to 65 per cent
Debt instruments: up to 45 per cent
Equity: up to 25 per cent
Short-term debt: up to 10 per cent
Asset-backed and miscellaneous investments: up to 5 per cent
The new options are already live on Central Recordkeeping Agency platforms.
[The Business Standard]
