Major Changes in National Pension System: Employees Set to Benefit with Better Returns

NPS Update: Employees of Central Autonomous Bodies (CABs) will now have access to new and improved investment options within the NPS. This will allow eligible employees to select investment options tailored to their specific needs.

NPS Update: Every working professional aspires to accumulate enough funds during their career so that they do not have to depend on others for daily needs after retirement. This is why a large number of people prefer investing in the NPS (National Pension System). Employees of Central Autonomous Bodies (CABs) will now gain access to new and better investment options under the NPS.

What is the government's decision?

The Central Government has introduced two new investment options under the NPS. Employees can now choose investment options based on their specific requirements and risk appetite. The Department of Expenditure under the Ministry of Finance has issued a memorandum stating that the Department of Financial Services' notification dated November 13, 2025, will now also apply to CAB employees.

What are the two options?

1. Employees will now have access to a new investment option named 'LC-75-High'. This was previously known as the 'Aggressive Life Cycle Fund (LC-75)'.
Under this option, up to 75% of the funds can be invested in equity. However, it is important to note that this option is suitable for employees who seek higher returns over the long term and are willing to take risks.

2. Additionally, the 'Balanced Life Cycle Fund' has been renamed the 'Aggressive Life Cycle Fund' for the second option.
In this option, up to 50% of the funds can be invested in equity. The equity exposure gradually decreases after the age of 45, thereby reducing the associated risk.

Will employees benefit?

These new options will enable employees to select investments that align with their specific needs—allowing them to choose options based on their individual risk appetite. Both these new investment options will soon be made available on the CRA system, after which eligible NPS employees will be able to select the option that best suits their requirements.