New Delhi:
The Pension Fund Regulatory and Development Authority (PFRDA) is planning to launch new life cycle fund options within the next two to three months.
This initiative aims to make the New Pension System (NPS) more appealing to young non-government subscribers, helping them build a substantial retirement corpus.
PFRDA Chairman Deepak Mohanty announced that the proposed scheme would increase exposure to equity markets.
The new balanced life cycle fund, expected to launch in the second quarter (July-September), will allocate investments to equity share funds for a longer duration.
Currently, there are three life cycle funds: LC75 (Aggressive Auto Choice), LC50 (Moderate Auto Choice), and LC25 (Conservative Auto Choice).
New Investment Options and Equity Allocation
Life cycle funds allow subscribers to allocate investments between equity and debt based on their chosen option.
These funds offer different investment choices, including auto/active options for Tier-1 and Tier-2 NPS accounts.
Under the new scheme, equity investment will gradually decrease when subscribers turn 45 years old, instead of the current age of 35.
This change will enable NPS subscribers to invest more in equity funds for a longer period, balancing risk and return while building a pension corpus in the long term.
In the financial year 2023-24,
NPS non-government registrations reached 9.7 lakh and are expected to increase to 11 lakh in the current financial year.
Growth of the Atal Pension Scheme (APY)
Regarding the Atal Pension Scheme (APY), PFRDA Chairman Mohanty reported that 1.22 crore new subscribers joined the scheme in the financial year 2023-24.
This is the highest number of new subscribers in any financial year since the scheme’s inception, with women making up 52% of the new subscribers.
It is anticipated that 1.3 crore subscribers will join APY in the financial year 2024-25. By June 2024,
the total number of APY subscribers is expected to exceed 6.62 crores.
