NPS Investment Options
The NPS subscriber has flexibility to select among the seven Fund Managers (PFM).
Aditya Birla Sun Life Pension Management Limited is a pension fund manager appointed by PFRDA, for managing pension fund under NPS. The pension funds are managed in accordance with the investment guidelines issued by PFRDA.
Asset class available in NPS
The subscribers has the option to invest into four different asset, these asset class are -
- Asset class E – Equity and equity-related instruments
- Asset class C – Corporate debt and debt-related instruments
- Asset class G – Government bond and other government back securities
- Asset class A – Alternative investments like Commercial Mortgage-Backed Securities (CMBS), Real Estate Investment Trusts (REITS), Infrastructure Investment Trusts (InvIts), venture capital fund etc.
Investment choices
The subscriber can opt to select either Active choice or Auto choice option
Active Choice
Under the Active choice option, the subscriber can select their asset allocation based on their preference. This asset allocation is subject some restriction based on age limitation:
- Upto 50 years can allocate a maximum of 75% of their investment to asset class E
- The contributions to asset class A at any time cannot more than 5% of the total subscriber contribution
- The allocation of contribution for the subscriber age over 50 year will be capped in asset class E as per the table listed below.
Here is a detailed representation of the cap on asset allocation in different asset classes
| Age | Cap on Asset Class E | Cap on Asset Class C | Cap on G | Cap on Asset Class A |
|---|---|---|---|---|
| Up to 50 years | 75% | 100% | 100% | 5% |
| 51 | 72.50% | 100% | 100% | 5% |
| 52 | 70% | 100% | 100% | 5% |
| 53 | 67.50% | 100% | 100% | 5% |
| 54 | 65% | 100% | 100% | 5% |
| 55 | 62.50% | 100% | 100% | 5% |
| 56 | 60% | 100% | 100% | 5% |
| 57 | 57.50% | 100% | 100% | 5% |
| 58 | 55% | 100% | 100% | 5% |
| 59 | 52.50% | 100% | 100% | 5% |
| 60 years and above | 50% | 100% | 100% | 5% |
Auto Choice
NPS subscribers who do not have the ability to decide their own asset allocation can opt for Auto choice option (life stage investing option). Under this option, funds are allocated based on subscriber age. Under the Auto choice option there are further set of three risk base investment option LC25, LC 50 and LC75.
LC25 – Conservative Life Cycle fund
The LC25 has a cap of 25% on the total asset allocation in asset class E. The exposure to equity investments reduces gradually as the subscriber grows older.
Asset class distribution at a different age for LC 25 is as under
| Age | Asset Class E | Asset Class C | Asset Class G |
|---|---|---|---|
| Up to 35 years | 25% | 45% | 30% |
| 36 | 24% | 43% | 33% |
| 37 | 23% | 41% | 36% |
| 38 | 22% | 39% | 39% |
| 39 | 21% | 37% | 42% |
| 40 | 20% | 35% | 45% |
| 41 | 19% | 33% | 48% |
| 42 | 18% | 31% | 51% |
| 43 | 17% | 29% | 54% |
| 44 | 16% | 27% | 57% |
| 45 | 15% | 25% | 60% |
| 46 | 14% | 23% | 63% |
| 47 | 13% | 21% | 66% |
| 48 | 12% | 19% | 69% |
| 49 | 11% | 17% | 72% |
| 50 | 10% | 15% | 75% |
| 51 | 9% | 13% | 78% |
| 52 | 8% | 11% | 81% |
| 53 | 7% | 9% | 84% |
| 54 | 6% | 7% | 87% |
| 55 | 5% | 5% | 90% |
LC50 – Moderate Life Cycle Fund
The LC25 has a cap of 50% on the total asset allocation in asset class E. The exposure to equity investments reduces gradually as the subscriber grows older
Asset class distribution at different age for LC50 is as under
| Age | Asset Class E | Asset Class C | Asset Class G |
|---|---|---|---|
| Up to 35 years | 50% | 30% | 20% |
| 36 | 48% | 29% | 23% |
| 37 | 46% | 28% | 26% |
| 38 | 44% | 27% | 29% |
| 39 | 42% | 26% | 32% |
| 40 | 40% | 25% | 35% |
| 41 | 38% | 24% | 38% |
| 42 | 36% | 23% | 41% |
| 43 | 34% | 22% | 44% |
| 44 | 32% | 21% | 47% |
| 45 | 30% | 20% | 50% |
| 46 | 28% | 19% | 53% |
| 47 | 26% | 18% | 56% |
| 48 | 24% | 17% | 59% |
| 49 | 22% | 16% | 62% |
| 50 | 20% | 15% | 65% |
| 51 | 18% | 14% | 68% |
| 52 | 16% | 13% | 71% |
| 53 | 14% | 12% | 74% |
| 54 | 12% | 11% | 77% |
| 55 | 10% | 10% | 80% |
LC75 – Aggressive Life Cycle Fund
The LC25 has a cap of 75% on the total asset allocation in asset class E. The exposure to equity investments reduces gradually as the subscriber grows older
Asset class distribution at different age for LC75 is as under
| Age | Asset Class E | Asset Class C | Asset Class G |
|---|---|---|---|
| Up to 35 years | 75% | 10% | 15% |
| 36 | 71% | 11% | 18% |
| 37 | 67% | 12% | 21% |
| 38 | 63% | 13% | 24% |
| 39 | 59% | 14% | 27% |
| 40 | 55% | 15% | 30% |
| 41 | 51% | 16% | 33% |
| 42 | 47% | 17% | 36% |
| 43 | 43% | 18% | 39% |
| 44 | 39% | 19% | 42% |
| 45 | 35% | 20% | 45% |
| 46 | 32% | 20% | 48% |
| 47 | 29% | 20% | 51% |
| 48 | 26% | 20% | 54% |
| 49 | 23% | 20% | 57% |
| 50 | 20% | 20% | 60% |
| 51 | 19% | 18% | 63% |
| 52 | 18% | 16% | 66% |
| 53 | 17% | 14% | 69% |
| 54 | 16% | 12% | 72% |
| 55 | 15% | 10% | 75% |
