NPS vs APY: Good news for NPS and APY investors, dual valuation system to be implemented, know the 3 benefits you will get..

The Pension Fund Regulatory and Development Authority (PFRDA) has released a new consultation paper to protect investors' interests and enhance transparency. Its purpose is to improve the valuation guidelines for government securities in long-only funds.

The paper, titled "Alignment of Valuation Guidelines with the Core Objectives of Long-Only Funds," was released on October 17, 2025. Its focus is on making investments in pension schemes like NPS and APY more stable so that subscribers can see better and clearer returns over the long term.

What is the new dual valuation framework?

This proposal calls for a dual valuation framework, which will use two methods:

Both methods will be combined to value long-term government bonds. The advantage of this is that small fluctuations in market interest rates will not significantly impact the Net Asset Value (NAV) of pension schemes.

What will be the benefit for subscribers?
According to PFRDA, the new framework will have three major benefits:

Glimpse of stable returns: Investors will get a clear and stable picture of their pension wealth.

Reduced volatility: Short-term changes in interest rates will reduce the impact on NAV.

Long-term investment incentives: Funding for long-term infrastructure projects will become easier.
This will not only increase investor confidence but also contribute to India's capital formation and economic stability.

Suggestions sought from stakeholders.
PFRDA has sought comments on this paper from all stakeholders, including existing and potential NPS subscribers, pension funds, industry experts, academics, and the general public. Any individual or organization wishing to provide their feedback can submit it by November 30, 2025. The paper is available in the Research and Publication section of the PFRDA website. You can also access it through this link: https://pfrda.org.in/en/web/pfrda/consultation-papers

A Step Towards Economic Stability
This move signals that PFRDA intends to strengthen the Indian financial system, not just pension management. Adopting a dual valuation framework will provide a more transparent and reliable framework for pension investments.

This new proposal by PFRDA will make the pension investment system in India more stable and reliable. It will provide investors with accurate valuations over the long term and protect them from short-term market fluctuations. Based on the suggestions received in the coming months, major improvements in this direction are expected.

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