NPS update: Government extends 2 new investment options to these employees

Employees of central autonomous bodies (CABs) covered under the National Pension System (NPS) will now have access to two additional investment choices that were earlier available only to central government employees. The Finance Ministry on Tuesday said the Department of Expenditure has extended the applicability of the Department of Financial Services’ notification dated 13 November 2025, to NPS subscribers employed in central autonomous bodies.

The decision, announced through a Press Information Bureau (PIB) release, aims to provide greater flexibility to NPS subscribers in planning their retirement investments in line with their financial goals and risk appetite.

The Department of Expenditure issued an Office Memorandum on 1 July 2026, extending the additional investment choices to employees of central autonomous bodies covered under the pension scheme.

What are the new investment options?

The first option is LC-75 High, formerly known as the Aggressive Life Cycle Fund (LC-75). It allows equity exposure of up to 75%, making it suitable for subscribers with a higher risk appetite and a longer investment horizon seeking higher long-term growth potential.

The second option is the Aggressive Life Cycle Fund, which was previously known as the Balanced Life Cycle Fund (BLC). This investment choice limits equity exposure to 50%. The allocation to equities is gradually reduced once the subscriber reaches 45 years of age, helping shift the portfolio towards less volatile asset classes as retirement approaches.

These two life cycle funds are in addition to the investment choices already available under the NPS and are designed to cater to different risk-return preferences of subscribers.

Why has the government made this change?

According to the Finance Ministry, extending these investment options to employees of central autonomous bodies will give subscribers greater flexibility to align their pension investments with their individual risk appetite, financial goals, and retirement planning requirements.

The ministry said the move also strengthens subscriber choice and enhances the National Pension System’s attractiveness to employees covered under the retirement scheme.

The additional options were first introduced for central government employees through a Department of Financial Services notification issued on 13 November 2025. With the latest decision, employees of central autonomous bodies covered under the NPS will also be able to choose these investment options.

What happens next?

The Finance Ministry has directed all administrative ministries and departments to inform the central autonomous bodies under their administrative control about the availability of the two new investment choices.

Eligible subscribers will be able to exercise their preferred investment option through the Central Recordkeeping Agency (CRA) system, subject to the operational guidelines issued under the National Pension System.

The latest move is expected to bring greater parity between central government employees and employees of central autonomous bodies covered under the NPS by offering both groups a wider range of investment choices for retirement planning.