Ziraat Times Team Report
NEW DELHI — The Government of India, through the Ministry of Finance, has approved a significant expansion of investment choices for Central Government Employees enrolled in the National Pension System (NPS) and the Unified Pension Scheme (UPS). The decision extends the popular Life Cycle 75 (LC75) and Balanced Life Cycle (BLC) options to government subscribers, matching the flexibility currently available to non-government NPS members.
The move, announced late Friday, is in direct response to sustained demand from Central Government employees seeking a broader and more customized range of investment paths to manage their retirement savings.
New Investment Choices
Central Government employees can now select from a wider spectrum of investment options, categorized by their equity (stock market) exposure and the built-in mechanism for reducing risk as the employee approaches retirement.
Option |
Investment Strategy |
Maximum Equity Exposure |
Risk Management |
LC75 |
High-risk growth option |
75% |
Equity gradually tapers from age 35 to 55, reaching 15%. |
BLC |
Modified moderate-risk option |
50% |
Equity tapering starts later, from age 45, enabling longer equity exposure. |
LC-50 |
Moderate-risk growth option |
50% |
Equity gradually tapers from age 35 to 55. |
LC-25 |
Low-risk conservative option |
25% |
Equity gradually tapers from age 35 to 55. |
Scheme G |
Fixed Returns |
0% |
100% investment in Government securities. |
Default Option |
Determined by PFRDA |
Varies |
Auto-allocated investment pattern defined by the regulator. |
Key Benefits for Employees
The extension of the LC75 and BLC options is set to enhance flexibility and protection for government employees’ retirement planning:
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Greater Flexibility and Choice: Employees are empowered to select investment patterns that align more closely with their personal financial goals and tolerance for risk.
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Built-in Safety (Glide Path Mechanism): Both the LC75 and BLC options include an automatic “glide path” mechanism. This feature ensures that equity allocation is automatically reduced as the employee ages, thus protecting the accumulated corpus from large market fluctuations as the retirement date nears. For instance, the equity exposure in LC75 will automatically reduce to 15% by age 55, and the BLC option reduces its equity exposure to 35% by age 55.
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Diversified Choices: The expanded “Auto Choice” options reflect varied risk-return preferences, allowing for a more nuanced approach to retirement savings management.