Pension Fund Regulator Announces New Life Cycle Funds for NPS Subscribers

PFRDA Chairman Deepak Mohanty announced the introduction of new life cycle fund options for NPS subscribers, including an increased tapering age and greater equity exposure. The changes will take effect by September 2023. The Atal Pension Yojana and NPS enrolment numbers are also on an upward trend.

Deepak Mohanty, the chairman of the Pension Fund Regulatory and Development Authority (PFRDA), announced on Friday that new life cycle fund options for National Pension System (NPS) subscribers will be launched by September.

Mohanty stated that the tapering age would be increased to 45 years from the current 35 years to allow greater exposure to equity markets.

The updated scheme is expected to be implemented in the next quarter, likely in August or September. These changes aim to provide more investment options and better returns for subscribers.

Currently, there are three life cycle fund options available—LC 75, LC 50, and LC 25—each offering a different balance of equity and debt investments.

This move comes as the Atal Pension Yojana sees continued success with 1.24 crore new subscribers in FY24, 52% of them being women, according to Mohanty.

Since its inception, APY has added 6.6 crore subscribers, rapidly gaining popularity among women and the younger generations in India.

The APY enrolment target for the current financial year is 1.3 crore subscribers.

Similarly, NPS (non-government) enrolments reached 9.7 lakh in FY24 and are expected to grow to 11 lakh in the current fiscal year, he added.

Mohanty also noted that the total corpus, including APY, should increase to Rs 15 lakh crore by the end of FY25, up from Rs 12.4 lakh crore at the end of FY24, given normal market conditions.