**Executive Summary**
This circular, issued by the Pension Fund Regulatory and Development Authority (PFRDA) on December 1st, 2025, announces the enhancement of investment choice options under the National Pension System (NPS) and Unorganized sector Pension Scheme (UPS) for Central Government (CG) subscribers, effective immediately. This enhancement increases the total number of available investment choices to six, by introducing two additional Auto Investment Choice options. The circular also refers to Gazette Notification No. FX-4/2/2025-PR dated 13.11.2025.
**Key Points / Main Content**
* **Investment Choice Expansion:**
* Two new Auto Investment Choice options are introduced:
* Auto Choice - Life Cycle 75 - High (15E/55Y)
* Auto choice - Life Cycle - Aggressive (35E/55Y)
* This brings the total investment options for CG subscribers to six.
* **Investment Options Available:**
* Existing options include:
* Default Scheme
* Active Choice (100% G-Sec)
* Auto Choice - Life Cycle 25 - Low (5E/55Y)
* Auto Choice – Life Cycle 50- Moderate (10E/55Y)
* **Default Scheme Investment:**
* Contributions are invested per a predefined asset allocation pattern managed by three Pension Funds.
* Asset allocation under the Default Scheme is described in 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% (Limit increase to 25% from April 1st 2025)
* Short Term Debt Instruments (Money Market): Up to 10%
* Asset Backed, Trust Structured and Misc. Investments – Asset class A: Up to 5%
* Total = 150%
* **Alternate Investment Choices:**
* Subscribers opting for an alternative investment choice must exercise one of the five non-default options and select one Pension Fund from the ten currently registered with PFRDA.
* **Comprehensive 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.
* **Availability:**
* The enhanced investment choice options are already available to CG subscribers via the Central Record keeping Agencies (CRAs).
**Impact Analysis**
**Central Government Subscribers (CG)**
* **Impact**
* Have access to an expanded range of investment choices within NPS and UPS.
* Need to review investment options and make informed decisions.
* **Action Required**
* Review the available investment options.
* Exercise one of the five non-default options (if choosing an alternative).
* Select one Pension Fund from the ten currently registered with PFRDA (if choosing an alternative).
**Central Record Keeping Agencies (CRAs)**
* **Impact**
* Already providing the enhanced investment choice options to CG subscribers.
* **Action Required**
* Continue to make the investment choices accessible to subscribers.
**Pension Funds Registered with PFRDA**
* **Impact**
* Subscribers must choose one of the ten registered Pension Funds if not opting for Default Scheme.
* **Action Required**
* Continue to manage investments based on chosen investment strategy.
Key Entities Referenced
PFRDA Act, 2013: Governs the Pension Fund Regulatory and Development Authority and the National Pension System.
National Pension System (NPS): A defined contribution pension scheme in India. This circular enhances investment choices under NPS for Central Government Subscribers.
Pension Fund Regulatory and Development Authority (PFRDA): The regulatory body for pension funds in India, issuing this circular to notify changes to investment choice options under NPS.
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%