PFRDA Adds New Investment Options for NPS & UPS Subscribers

Central Government employees enrolled in the National Pension System (NPS) and Unified Pension Scheme (UPS) now have a broader range of investment options. The Pension Fund Regulatory and Development Authority (PFRDA), through its circular dated 1 December 2025, has announced the introduction of two new Auto Choice investment options, increasing the total available choices from four to six.

The expansion follows the Gazette Notification No. FX-4/2/2025-PR issued on 13 November 2025 by the Ministry of Finance (Department of Financial Services), enabling more flexibility and tailored risk-return profiles for Central Government subscribers.

Existing Investment Options for Central Government Subscribers

As per the circular, the following choices are currently available under NPS and UPS:

1. Default Scheme

Investments are made according to a predefined asset allocation pattern, managed by three Pension Funds. The allocation pattern is provided in Annexure I (reproduced below).

2. Active Choice (100% G-Sec)

Invests the entire contribution solely in Government Securities.

3. Auto Choice – Life Cycle 25 (Low) [5E/55Y]

Equity exposure remains at 25% up to age 35 and gradually reduces to 5% by age 55.

4. Auto Choice – Life Cycle 50 (Moderate) [10E/55Y]

Equity exposure remains at 50% up to age 35 and tapers to 10% by age 55.

PFRDA also noted that only about 4% of Central Government subscribers have opted for an alternative to the Default Scheme.

Two New Auto Choice Options Introduced

In line with the Gazette Notification, PFRDA has added the following options for Central Government subscribers:

5. Auto Choice – Life Cycle 75 (High) [15E/55Y]

75% equity exposure until 35 years of age
Tapers gradually to 15% by age 55

6. Auto Choice – Life Cycle – Aggressive (35E/55Y)

50% equity exposure until 45 years
Levels down to 35% at age 55

These new choices offer more diversified approaches for subscribers seeking higher or more moderate equity exposure.

Mandatory Requirements for Non-Default Selection

Subscribers choosing any of the five non-default options must:

Select the preferred investment option, and
Choose one Pension Fund from the ten PFs registered with PFRDA.

Subscribers are encouraged to review past performance data for schemes and Pension Funds available on the NPS Trust website (www.npstrust.org.in) before making a selection.

Rationalisation of Life Cycle Fund Names

PFRDA has also aligned the nomenclature of Auto Choice / Life Cycle Funds with their asset allocation patterns and tapering structures. This follows the earlier circular dated 17 October 2025 (Ref: PFRDA/2025/16/Reg-PF/02), which is attached as Annexure II to the current circular.

Asset Allocation under Default Scheme (Annexure I)

(Recreated exactly as presented in the PDF)

Asset Allocation under Default Scheme

Category	Investment Pattern	NPS / UPS Schemes
I	Government Securities and Related Investments	Up to 65%
II	Debt Instruments and Related Investments	Up to 45%
III	Equities and Related Investments (From 1st April 2025 limit increase to 25%)	Up to 25%
IV	Short Term Debt Instruments (Money Market)	Up to 10%
V	Asset Backed, Trust Structured and Misc. Investments – Asset Class A	Up to 5%
Total	—	150%

(The table above is reproduced exactly as structured in the circular, with 3 columns.)

Availability and Legal Standing

PFRDA confirmed that the enhanced investment choices have already been enabled by the Central Recordkeeping Agencies (CRAs). The circular is issued under: