New Delhi, Oct 24 In a bid to help Central Government employees choose from a range of investment options, the government on Friday said it has approved the extension of LC75 and BLC investment options under both the National Pension System (NPS) and the Unified Pension Scheme (UPS).
This is in line with the continued demand from Central Government employees for a broader range of investment options similar to those available to non-government subscribers.
These options are designed to enhance flexibility in retirement planning and allow employees to manage their retirement corpus according to individual preferences, according to a Ministry of Finance statement.
Under NPS and UPS, the Central Government employees can now choose from a range of investment options.
There are Default option where A ‘default pattern’ of investment defined by Pension Fund Regulatory and Development Authority (PFRDA) from time to time; Scheme G with 100 per cent investment in Government securities for low-risk, fixed returns; LC-25 with maximum equity allocation of 25 per cent, tapering gradually from age 35 to 55; LC-50 with maximum equity allocation of 50 per cent, tapering gradually from age 35 to 55; BLC (Balanced Life Cycle) with Modified version of LC50, with equity allocation tapering from age 45, enabling employees to remain invested in equities for a longer period if desired; and LC75 with Maximum equity allocation of 75 per cent, tapering gradually from age 35 to 55.
The decision will offer key benefits such as greater flexibility and choice where employees can select options that best suit their retirement goals and risk preferences.
Equity allocation automatically reduces with age — 15 per cent for LC75 and 35 per cent for BLC by age 55 — ensuring protection against large market fluctuations as retirement approaches.
“Broadened Auto Choice options — these funds provide more diversified choices for retirement planning, reflecting employees’ varied risk-return preferences,” the ministry said, adding that employees can use these options to structure their retirement savings according to their individual risk-return preferences.
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