To enhance flexibility in retirement planning, the Centre has allowed Life Cycle 75 (LC 75) and Balanced Life Cycle (BLC) options for central government employees under the market-linked National Pension System (NPS) and the guaranteed Unified Pension Scheme (UPS) under the default option. The move raises the equity exposure limit to 75% from the earlier 50%.
In LC 75, the maximum equity allocation will be 75%, which will gradually taper from age 35 to 55. In LC 50, the maximum equity allocation will be 50%, tapering gradually over the same age range.
“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,” a finance ministry statement said.
The increased flexibility will allow central government employees to manage their retirement corpus according to their individual preferences.
Other default investment options include Scheme G, where the entire corpus is invested in government securities to ensure low-risk, fixed returns. Under LC 25, the maximum equity allocation is 25%, tapering gradually from age 35 to 55. In LC-50, the maximum equity allocation is 50%, tapering gradually from age 35 to 55.
Employees can choose investment options that best align with their retirement objectives and risk preferences. “These funds provide more diversified choices for retirement planning, reflecting employees’ varied risk-return preferences,” the statement said.