The Finance Ministry officially announced on Tuesday, July 8 that employees of Central Autonomous Bodies (CABs) covered under the National Pension System will now have access to two additional investment options that were previously exclusive to Central Government workers. According to the Department of Expenditure, the applicability of the Department of Financial Services notification dated November 13, 2025 has been extended to CAB employees with immediate effect. This decision aims to provide greater flexibility for NPS subscribers in Central Autonomous Bodies, enabling them to align their pension investments with their individual risk appetite, financial goals, and retirement planning requirements. The move enables subscribers to select an investment strategy based on their age, financial goals and willingness to take market risk, instead of relying only on the earlier default options. As per Business Standard, the government had earlier introduced these investment choices for central government employees and has now extended them to CAB subscribers, with the decision announced through a government memorandum and subsequently detailed in a Press Information Bureau (PIB) release.
The Pension Fund Regulatory and Development Authority (PFRDA) has expanded the investment choices available under the National Pension System (NPS) for subscribers of Central Autonomous Bodies (CABs), giving them access to two new Auto Choice lifecycle options. According to PFRDA's circular, CAB subscribers can now choose from six investment options under the NPS, including the 'LC-75-High (previously Aggressive Life Cycle Fund)' and the 'Aggressive Life Cycle Fund'. The Auto Choice – Life Cycle 75 (High) invests up to 75% of the corpus in equities until the subscriber turns 35, with equity allocation then gradually reduced to 15% by the age of 55. The Auto Choice – Life Aggressive maintains a 50% equity allocation until the subscriber reaches 45 years of age, after which it gradually declines to 35% by the age of 55. Before this change, CAB subscribers had access to four investment options: the Default Scheme, Active Choice (100% Government Securities), Auto Choice – Life Cycle 25 (Low), and Auto Choice – Life Cycle 50 (Moderate). Subscribers opting for any investment option other than the Default Scheme will also have to select one of the pension funds registered with PFRDA.
The second available option is the 'Aggressive Life Cycle Fund', now rebranded from the previous 'Balanced Life Cycle Fund (BLC)'. According to the Ministry of Finance, this investment option maintains equity exposure capped at 50%, providing a more conservative approach compared to the high equity option. The fund features a gradual reduction in equity allocation beginning from age 45 years, offering a balanced strategy that combines growth potential with stability considerations for retirement planning. The Aggressive Life Cycle Fund follows a more balanced approach, limiting equity exposure to 50% and progressively reducing it after the age of 45, lowering portfolio risk as retirement nears. These two life cycle funds are in addition to the investment choices already available under the NPS and are designed to cater to different risk-return preferences of subscribers. As per Business Standard, the government described it as "an investment option with equity exposure capped at 50 per cent, with a gradual reduction in equity allocation beginning from the age of 45 years, offering a balanced approach between growth and stability."
The expansion of NPS options to CABs employees introduces multiple life-cycle strategies available under the Auto Choice framework, where pension corpus is invested automatically based on subscriber age. According to Business Standard, eligible subscribers can now choose from Life Cycle 25 (Low Risk), Life Cycle 50 (Moderate Risk), LC-75-High with equity exposure up to 75%, and the Aggressive Life Cycle Fund with equity exposure capped at 50%. Under Active Choice, subscribers decide how much of their pension corpus should be invested across different asset classes, while under Auto Choice, allocation is managed automatically through life-cycle strategies where the mix of equity, government securities and corporate debt changes as the subscriber ages. The newly extended options are part of this Auto Choice framework, providing greater flexibility for retirement savings management while enabling subscribers to align investments with their financial goals and risk profile. The Finance Ministry has directed all administrative Ministries and departments to inform the Central Autonomous Bodies under their control about the availability of these investment choices and advise them to disseminate this information among eligible NPS subscribers.
In its circular, PFRDA advised subscribers to choose their investment option after reviewing the performance of schemes and pension funds. "Subscribers are advised to exercise their investment choice judiciously, based on a review of the performance of schemes and Pension Funds. Updated scheme-wise and Pension Fund-wise performance information is available on the NPS Trust website, and subscribers are encouraged to make informed decisions," the regulator said. The expansion is intended to provide CAB subscribers with greater flexibility in aligning their pension investments with their risk appetite and long-term retirement goals. As per PFRDA, the regulator emphasized that subscribers should make informed decisions based on performance data available on the NPS Trust website, ensuring they select options that align with their individual financial objectives and risk tolerance levels.
