New Delhi. An important information to pension has come to light for central government employees. The Pension Fund Regulatory and Development Authority (PFRDA) has approved two new auto choice investment models, further expanding investment options within the National Pension System (NPS) and the Unified Pension System (UPS). With this, a total of 6 investment options have now become available to central employees.
According to the circular issued on December 1, there are new options.
Auto Choice Life Cycle 75–High (15E/55Y)
Auto Choice Life Cycle-Aggressive (35E/55Y)
These options can be especially beneficial for employees who want better returns with more or less risk at different stages of life.
1. Auto Choice Life Cycle 75–High (15E/55Y): High equity exposure for youth
In this option, 75% of the total contribution will be invested in equities till the subscriber is 35 years of age. After the age of 35, this equity allocation will gradually reduce and at the age of 55 it will come to 15%. This model is suitable for employees who aim for higher returns in the long term by taking more risk early in their career.
2. Auto Choice Life Cycle-Aggressive (35E/55Y): Option for better returns with moderate risk
In this option, 50% of the contribution remains in equity till the age of 45 years. After 45 years this proportion gradually decreases and reaches 35% by the age of 55 years. This scheme is suitable for employees who want to invest in equities but do not want to take too much risk.
Pre-existing options
With the addition of these two new options, a total of 6 investment options are now available. The existing schemes are Default Scheme, Active Choice, Auto Choice – Life Cycle 25 (Low) (5E/55Y), Auto Choice – Life Cycle 50 (Moderate) (10E/55Y), now employees have the flexibility to choose from more options as per their risk appetite and investment strategy.
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