NPS and UPS Equity Exposure Limit Increased to 75% for Government Employees

In a move aimed at expanding retirement planning flexibility, the Government of India has approved the inclusion of the Life Cycle 75 (LC75) and Balanced Life Cycle (BLC) investment options for Central Government employees. 

The decision, announced by the Ministry of Finance, extends these schemes under both the National Pension System (NPS) and Unified Pension Scheme (UPS), offering employees a broader spectrum of risk-adjusted investment choices.

New Investment Options for Broader Choice

Under the expanded framework, Central Government employees can now choose from a wider range of life cycle-based investment models designed by the Pension Fund Regulatory and Development Authority (PFRDA). These include the default investment pattern, Scheme G (100% government securities), LC25, LC50, BLC, and LC75.

The LC75 plan allows up to 75% equity exposure, tapering gradually from age 35 to 55, while the LC50 and LC25 models cap equity exposure at 50% and 25% respectively. The newly introduced Balanced Life Cycle (BLC) variant modifies the LC50 model by maintaining higher equity allocation till age 45, providing longer participation in equities for employees seeking higher long-term returns.

Greater Flexibility and Smarter Pension Planning

According to the Finance Ministry, these enhancements are intended to help government employees align their pension investments with personal financial goals and risk preferences. The “glide path” mechanism in each fund ensures a gradual shift from equities to debt instruments as subscribers age, safeguarding them from market volatility closer to retirement.

The new framework broadens auto-choice options and supports better-informed financial planning. Employees can select from a mix of government securities, corporate bonds, and equities through pre-defined asset allocations that automatically adjust with age.

Structured Asset Allocation Model

As per the PFRDA-approved matrix, equity exposure for LC75 begins at 75% up to age 35 and reduces to 15% by age 55. The LC50 and LC25 models follow similar reductions from 50% and 25%, respectively, while BLC maintains an extended equity holding till mid-career before rebalancing toward fixed instruments. 

This systematic tapering helps balance growth potential and capital safety, providing a more stable retirement corpus.

Read More: New Banking Rules by RBI to Take Effect from November 1: What You Need to Know!

Conclusion

With the extension of LC75 and Balanced Life Cycle options, Central Government employees gain greater control over how their retirement savings grow and stabilise over time, marking a progressive step toward personalised and resilient pension management.

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