The Finance Ministry has extended two additional investment choices under the National Pension System (NPS) to employees of Central Autonomous Bodies (CABs), giving them greater flexibility to manage their retirement savings according to their financial goals and risk appetite. The move aligns investment options available to CAB employees with those already offered to Central government employees.
The Department of Expenditure issued an Office Memorandum on 1 July, extending the applicability of an earlier notification issued by the Department of Financial Services. Eligible subscribers can exercise their preferred investment option through the Central Recordkeeping Agency (CRA) system in accordance with operational guidelines.
Two New Investment Choices
The newly available options are the LC-75 High (Aggressive Life Cycle Fund) and the Balanced Life Cycle Fund (BLC). The LC-75 option allows equity exposure of up to 75 per cent in the early years of investment, making it suitable for subscribers with a higher risk appetite and a longer investment horizon. The Balanced Life Cycle Fund follows a relatively moderate asset allocation strategy while automatically adjusting investments as the subscriber ages.
The Finance Ministry said the additional choices would enable employees to better align their pension investments with their retirement planning objectives while offering a wider range of risk-return profiles.
The latest decision is expected to make the National Pension System more attractive for employees of Central Autonomous Bodies by providing investment flexibility similar to that enjoyed by Central government employees. It also supports the government's broader objective of improving retirement planning through greater subscriber choice and customised investment strategies.
Financial planners note that life-cycle funds automatically rebalance investments between equity, corporate debt and government securities as subscribers grow older, reducing investment risk closer to retirement. The expanded options are expected to benefit employees seeking either higher long-term growth potential or a balanced investment approach without actively managing their portfolios. |
