As per news reports, India’s pension sector, which now manages an impressive ₹15.5 trillion ($177 billion), is pushing for greater flexibility in how savings are invested. The Pension Fund Regulatory and Development Authority (PFRDA) is reviewing proposals from fund managers who want access to gold exchange-traded funds (ETFs) and relaxed norms around real estate and infrastructure trusts.
With retirement assets having more than tripled since the pandemic, managers are calling for reforms that match the scale of growth and allow them to generate stronger returns.
Portfolio managers recently met senior PFRDA officials, requesting permission to channel pension savings into gold ETFs and to ease restrictions on Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InVITs). At present, these instruments are grouped under the alternative investment category, which carries a cap of just 5% of overall investments.
As per news reports, Retirement Fund Managers argue that either this ceiling should be raised, or REITs and InVITs should be moved into the corporate bonds bucket to enable higher allocations. Earlier, the industry had also lobbied for leniency on tenor and rating rules for securities, though no decision has been taken yet.
The push for reform comes on the back of robust performance in 2025. Gold has been a standout asset, with Nippon India ETF Gold, SBI ETF Gold and HDFC Gold ETF all posting price gains of nearly 30%, according to Bloomberg data.
Similarly, REITs and InVITs have delivered strong returns this year, strengthening the case for more exposure. The regulator has already circulated draft language on gold investments to funds for feedback, though a senior PFRDA official declined to comment publicly.
Currently, the National Pension System divides investments into four categories: equities, corporate bonds, government bonds, and alternative investment funds, which include REITs and InVITs. The call for change reflects the industry’s belief that India’s pension framework must evolve alongside its rapid economic growth and deepening financial inclusion.
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India’s retirement savings pool has expanded rapidly, but fund managers believe outdated restrictions could hold back performance. By permitting gold ETFs and easing rules on REITs and InVITs, the PFRDA could unlock new avenues for growth while balancing risk. Whether through relaxing caps or reclassifying instruments, the regulator’s decision will be critical in shaping how ₹15.5 trillion in pension assets are managed in the coming years.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Aug 30, 2025, 1:35 PM IST
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