In a significant move aimed at expanding retirement investment choices for Central Government employees, the Ministry of Finance has notified amendments to the National Pension System (NPS) and Unified Pension Scheme (UPS), introducing two new life-cycle based pension funds with higher equity exposure limits.
The changes, published in the Gazette of India (Extraordinary) on Thursday, modify the original December 22, 2003 notification governing pension investment patterns. The latest amendment adds two new life-cycle fund categories—Aggressive Life Cycle (LC-75) and Balanced Life Cycle (BLC)—to the existing portfolio options available to government subscribers.
New Funds Allow Greater Flexibility
Under the revised framework:
Aggressive Life Cycle Fund (LC-75):
Allows equity exposure of up to 75%, making it the highest equity allocation permissible so far for government employees under NPS and UPS. This is targeted at younger subscribers seeking higher long-term returns through equity-linked growth.
Balanced Life Cycle Fund (BLC):
Caps equity investment at 50%, with automatic tapering beginning at age 45. This structure is designed to gradually reduce market-linked risk as the employee nears retirement, ensuring more stability in fund value.
Until now, government subscribers were limited to more conservative investment choices with relatively lower equity caps. The introduction of LC-75 and BLC significantly widens the risk-return spectrum.
Aimed at Offering ‘More Investment Options’
The Ministry stated that the decision was taken “in order to allow more investment options to Central Government employees under the National Pension System and Unified Pension Scheme,” reflecting the Centre’s effort to align pension planning with evolving financial goals and market realities.
The latest amendment builds on earlier revisions made through notifications dated 31 January 2019 and 24 January 2025, which had updated various aspects of pension fund management and investment patterns.
Notification Details
Date: 13th November, 2025