Key Takeaways
- Government employees can now invest up to 75% in equities via NPS/UPS
- Two new voluntary options: LC-75 and Balanced Life Cycle (BLC)
- Aims to match private sector pension flexibility and boost retirement returns
In a significant pension reform, the Central government has introduced two new investment options—Life Cycle 75 (LC-75) and Balanced Life Cycle (BLC)—for its employees under the National Pension System (NPS) and Unified Pension Scheme (UPS). This move dramatically increases the equity exposure limit from 50% to 75%, bringing government staff on par with private sector subscribers.
What Are the New NPS Options?
The LC-75 plan is designed for younger government employees comfortable with higher risk for potentially better growth. Equity allocation begins at 75% at age 35 and automatically reduces to 15% by age 55, balancing growth and safety as retirement approaches.
The Balanced Life Cycle (BLC) option allows employees to stay invested in equities for longer. It begins reducing the equity portion from age 45 instead of 35, ideal for those seeking extended stock market exposure and potentially higher returns.
Voluntary Choice Based on Risk Appetite
Both plans are voluntary. Employees can select between them based on their individual risk tolerance, financial goals, and comfort with market fluctuations.
Officials state this reform creates parity between government and private sector employees in pension investment flexibility. The move is expected to encourage more active NPS/UPS participation, helping employees grow their retirement savings more efficiently.
