PFRDA Expands Pension Fund Investment Horizons

The Pension Fund Regulatory and Development Authority (PFRDA) has expanded investment options for pension funds to improve returns. New opportunities include investing in NIFTY 250 stocks, gold and silver ETFs, and certain SEBI-regulated funds. The move aims to enhance the financial outcomes for pension subscribers in India.

The Pension Fund Regulatory and Development Authority (PFRDA) has announced an expansion of investment avenues for pension funds, aiming to deliver improved returns. This shift allows investment in NIFTY 250 Index stocks, capped at 25% of the total fund corpus, as outlined in a master circular dated December 10.

The regulator now permits diversifying into gold and silver ETFs as well as enabling investments in SEBI-regulated Infrastructure Investment Trusts (InvITs) and Alternative Investment Funds (AIFs) in Category I and II. It stipulates that AIF sponsors must not be promoters of the pension fund nor managed by investment managers linked to it.

Industry leaders, such as Amit Shetty of Embassy Office Parks REIT, heralded the move for its potential to channel long-term pension capital into high-quality assets. Gopal Jain of Gaja Capital remarks on the strategic updates as part of a clear trajectory for India's pension system, further developing the capital market framework.

(With inputs from agencies.)