PFRDA Issues Draft Rules for Pension Wealth Accumulation

The Pension Fund Regulatory and Development Authority (PFRDA) has issued a draft consultation paper proposing changes to how pension wealth is valued and presented to subscribers under the National Pension System (NPS) and Atal Pension Yojana (APY). 

Reports indicate that the document was released on October 17, 2025, and aims to create more clarity in the accumulation phase of pension wealth while keeping financial stability intact.

Proposed Dual Valuation Framework

The draft, titled “Alignment of Valuation Guidelines with the Core Objectives of Long-only Funds when Investing in Government Securities and Calculation of Net Asset Value (NAV)”, suggests introducing a dual valuation approach. This includes both accrual-based and fair market-based valuation methods for long-term government securities held under NPS and APY. 

The idea is to show a consistent picture of pension wealth during the accumulation period and limit the effect of short-term interest rate fluctuations on Net Asset Value (NAV).

Purpose of the Proposal

According to the draft, the plan is to align pension fund investments with long-term capital formation and reduce short-term volatility in fund values. It also seeks to make pension wealth information more straightforward for subscribers, as temporary market changes have minimal impact during the accumulation phase. The framework is part of PFRDA’s ongoing work to standardise practices and bring more clarity to pension fund operations.

Stakeholder Participation

PFRDA has invited comments and feedback from all relevant stakeholders, including NPS participants, pension fund managers, financial experts, academicians, and the general public. The consultation paper is available on the PFRDA website under the Research and Publications section. Suggestions and observations can be submitted until November 30, 2025.

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Conclusion

The draft framework forms part of a broader plan to update valuation guidelines for pension funds. Once the consultation process is completed, PFRDA will review the feedback and finalise the guidelines to ensure consistency and transparency in pension wealth reporting.

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.