**Executive Summary**
This circular, dated December 1, 2025, issued by the Pension Fund Regulatory and Development Authority (PFRDA), announces the expansion of Investment Choice Options under the National Pension System (NPS) & Unified Pension Scheme (UPS) for Central Government (CG) subscribers, in accordance with Gazette Notification No. FX-4/2/2025-PR dated 13.11.2025. Two additional Auto Investment Choice options have been introduced, increasing the total available choices to six. Subscribers are encouraged to exercise their investment choices judiciously.
**Key Points / Main Content**
* **Investment Choice Expansion:**
* Two new Auto Investment Choice options are introduced:
* Auto Choice - Life Cycle 75 - High (15E/55Y): Invests with a 75% equity exposure until age 35, tapering to 15% at age 55.
* Auto choice - Life Cycle - Aggressive (35E/55Y): Invests with a 50% equity exposure until age 45, tapering to 35% at age 55.
* **Existing Investment Choices:** The investment choices already available to CG subscribers under NPS and UPS are:
* Default Scheme: Contributions are invested as per a predefined asset allocation pattern managed by three Pension Funds. (See Annexure I).
* Active Choice (100% G-Sec): Investment solely in Government Securities.
* Auto Choice - Life Cycle 25 - Low (5E/55Y): 25% equity exposure until age 35, tapering to 5% at age 55.
* Auto Choice – Life Cycle 50- Moderate (10E/55Y): 50% equity exposure until age 35, tapering to 10% at age 55.
* **Alternative Investment Choices:** Subscribers opting for any alternative investment choices other than the default scheme need to:
* Exercise one of the five non-default investment options.
* Select one Pension Fund from among the ten Pension Funds currently registered with PFRDA.
* **Asset Allocation under Default Scheme (Annexure I):**
* Government Securities and Related Investments: Up to 65%
* Debt Instruments and Related Investments: Up to 45%
* Equities and Related Investments: Up to 25% (with a limit increase to 25% from 1st April 2025)
* Short Term Debt Instruments (Money Market): Up to 10%
* Asset Backed, Trust Structured and Misc. Investments – Asset class A: Up to 5%
* **Nomenclature Review:** PFRDA has reviewed the nomenclature of Auto Choice/Life Cycle Funds. The circular on "Rationalization of Nomenclature of Auto Choice / Life Cycle Funds under the NPS" dated 17th October 2025 vide reference PFRDA/2025/16/Reg-PF/02 is attached at Annexure II for ready reference.
* **Availability:** The enhanced investment choice options are already available via the Central Record keeping Agencies (CRAs).
**Impact Analysis**
**All NPS Stakeholders**
* **Impact:** Enhanced investment options are available to Central Government (CG) subscribers.
* **Action Required:** Subscribers are advised to exercise their investment choice judiciously, based on a review of the performance of schemes and Pension Funds. They must also exercise one of the five non-default investment options and select one Pension Fund from among the ten Pension Funds currently registered with PFRDA, should they choose not to use the Default Scheme.
Key Entities Referenced
PFRDA Act, 2013: The Act under which the Pension Fund Regulatory and Development Authority (PFRDA) derives its powers. Section 23 is specifically referenced.
National Pension System (NPS): A retirement savings scheme available to Indian citizens, including Central Government employees.
UPS: It is mentioned with NPS so stands for 'Unorganised sector Pension Scheme' a scheme specifically designed for workers in the unorganized sector to provide retirement savings.
Pension Fund Regulatory and Development Authority (PFRDA): The regulatory body for pension funds in India, responsible for issuing this circular.
Default Scheme: The default investment option within the NPS and UPS, with a predefined asset allocation pattern.
CIRCULAR
Circular No.: PFRDA/2025/21/Reg-PF/03 01st December 2025
To:
All NPS Stakeholders
Subject: Enhancement of Investment Choice Options under NPS & UPS for Central
Government Subscribers
1. Pursuant to the Gazette Notification No. FX-4/2/2025-PR dated 13.11.2025 issued by the
Ministry of Finance, Department of Financial Services, PFRDA hereby notifies the expansion
of the existing Investment Choice Options under the NPS and UPS for Central Government
(CG) employees. Two additional Auto Investment Choice options have been introduced,
thereby increasing the total number of available choices to six.
2. The following investment choices are currently available to CG subscribers:
Existing Investment Choice Description
under NPS and UPS
Contributions are invested as per the predefined asset
Default Scheme allocation pattern managed by three Pension Funds.
The asset allocation pattern under Default Scheme is attached
at Annexure I for ready reference.
Active Choice (100% G-
Sec) Investment solely in Government Securities.
The Subscriber’s contribution is invested with the equity
Auto Choice - Life Cycle 25
exposure of 25% until they reach 35 years and the equity
- Low (5E/55Y)
allocation tapers subsequently till it reaches 5% at the age of
55 years which continues till exit
The Subscriber’s contribution is invested with the equity
Auto Choice – Life Cycle
exposure of 50% until they reach 35 years and the equity
50- Moderate (10E/55Y)
allocation tapers subsequently till it reaches 10% at the age of
55 years which continues till exit
3. At present, approximately 4% of CG subscribers have opted for an investment choice other
than the Default Scheme.
4. In accordance with the above gazette notification, the following two additional Auto Choice
options are introduced:Additional Investment Description
Choice Options under NPS
and UPS
The Subscriber’s contribution is invested with the equity
Auto Choice - Life Cycle exposure of 75% until they reach 35 years and the equity
75 - High (15E/55Y) allocation tapers subsequently till it reaches 15% at the
age of 55 years which continues till exit
The Subscriber’s contribution is invested with the equity
Auto choice - Life Cycle - exposure of 50% until they reach 45 years and the equity
Aggressive (35E/55Y) allocation tapers subsequently till it reaches 35% at the
age of 55 years which continues till exit.
5. Subscribers opting for any alternative investment choices other than the Default Scheme
shall be required to:
o Exercise one of the five non-default investment options as mentioned above, and
o Select one Pension Fund from among the ten Pension Funds currently registered
with PFRDA.
6. Subscribers are advised to exercise their investment choice judiciously, based on a review of
the performance of schemes and Pension Funds. Updated scheme-wise and PF-wise
performance information is available on the NPS Trust website (www.npstrust.org.in), and
subscribers are encouraged to make informed decisions.
7. PFRDA has undertaken a comprehensive review of the existing nomenclature of Auto Choice
/ Life Cycle (LC) Funds to ensure consistency with asset allocation patterns and age-based
tapering structures. The circular issued on ''Rationalization of Nomenclature of Auto Choice /
Life Cycle Funds under the NPS'' dated 17th October 2025 vide
reference PFRDA/2025/16/Reg-PF/02 post such comprehensive review is attached at
Annexure II for ready reference.
8. The enhanced investment choice options are already made available to CG subscribers by the
Central Record keeping Agencies (CRAs).
9. This circular is issued in exercise of the powers conferred upon the Authority under Section
14(2)(b) read with Section 23 of the PFRDA Act, 2013, and Regulation 14(1) of the PFRDA
(Pension Fund) Regulations, 2015.
Yours faithfully,
Chief General Manager
Encl.: A/aAnnexure I
Asset Allocation under Default Scheme
NPS / UPS
Category Investment Pattern
Schemes
I Government Securities and Related Investments Up to 65%
II Debt Instruments and Related Investments Up to 45%
Equities and Related Investments
III Up to 25%
(From 1st April 2025 limit increase to 25%)
IV Short Term Debt Instruments (Money Market) Up to 10%
Asset Backed, Trust Structured and Misc. Investments –
V Up to 5%
Asset class A
Total 150%