The Pension Fund Regulatory and Development Authority (PFRDA) has established a committee to study the long-term inclusion of different asset classes in pension investments, as reported by PTI. According to PFRDA chairman S Ramann, the regulator is preparing for a likely overhaul of how retirement money under the National Pension System (NPS) is invested, seeking steadier delivery and potentially higher long-term returns to subscribers while reducing sharp market swings. "We have to look at new assets which can provide continuous and steady growth over a long period of time without volatility... We cannot show a very high return in one year, and after that, it drops off. That volatility we need to avoid," Ramann stated. The move comes at a time when the NPS subscriber base and corpus are expanding rapidly, increasing pressure on the regulator to balance return generation with capital protection.
At the end of FY26, the NPS had 21.7 million subscribers and a corpus of ₹15.95 trillion, according to PTI reports. Subscriber growth is expected to exceed 22 per cent this year. The regulator is studying global pension fund practices to design what Ramann described as a 'smooth glide path' for NPS investors, focusing on new assets that can provide continuous and steady growth over a long period without volatility. Current NPS investments are spread across equities, corporate bonds, government securities and alternative investment funds within prescribed limits.
The PFRDA panel is studying global pension fund practices to design what Ramann described as a 'smooth glide path' for NPS investors, as reported by PTI. The proposed changes may further refine how pension money is managed across different age groups, with younger NPS investors currently able to allocate a larger portion towards equities while exposure gradually reduces with age under lifecycle funds. "We have set up a committee which is looking into the long-term induction of different asset classes. We are learning from the experience of pension funds which are there globally. I am sure we will come up with a very good smooth glide path where we will be able to ensure that the returns coming to the NPS holders will be steady and will be on the rise," Ramann added. The regulator has not yet disclosed which new asset classes are under active consideration or when changes could be implemented.
Alongside investment diversification, the regulator is also revisiting the idea of a minimum assured pension framework under NPS, according to PTI reports. Ramann told PTI that the concept remains 'very much on the table', with the regulator examining a possible Unified Pension Scheme for the private sector. "We are certainly looking at the concept of a Unified Pension Scheme for the private sector. That is the way it is easily understood if one has a guaranteed scheme," Ramann said, adding that there is a need to balance risk and return. "Somebody has to provide a guarantee for assured return, like in Atal Pension Yojana (APY), the government gives assurance and they bear the cost," he explained. The proposal is aimed at addressing uncertainty over post-retirement income, as unlike traditional pension schemes, NPS returns are market-linked and therefore not guaranteed.
The regulator is intensifying outreach among non-salaried and informal sector workers, a segment where retirement planning remains limited, as reported by PTI. Ramann told PTI that PFRDA is targeting farmers, agrarian workers, micro and small enterprises, MSME clusters and self-help groups, which together account for nearly 20-25 crore people. "We have to target all these groups - this constitutes 20-25 crore people - and that is where it is our public duty to ensure that the right message goes to all these people (to save money for retirement)," Ramann emphasized. The push reflects a larger policy concern: India's ageing population is growing, but formal pension penetration remains relatively low outside government and corporate employment. For many households, retirement savings are still dependent on property, gold or family support rather than structured pension products.
