PFRDA introduces Balanced Life Cycle Fund option

These funds are widely adopted by the private sector subscribers under NPS. About 65 per cent of the private sector subscribers have chosen Life Cycle Funds amongst various investment choices.

Currently, there are three types of Life Cycle Funds under NPS:-

The Equity allocation start reducing after 35 years of age until the 55 years of age.

Balanced life cycle fund

Pension Fund Regulatory & Development Authority (PFRDA) has introduced another Life Cycle Fund called “Balanced Life Cycle Fund (BLC)”.

This fund is a predetermined mix of equity and debt that balances the risk of aging with market risk to maximise the return.

Eligibility

Available to subscribers in the private sector (All-Citizen Model and Corporate).

Features

• Equity allocation up to 50 per cent is maintained until the age of 45.
• Reduction in equity allocation starts from the age of 45, instead of 35.
• At age 55, equity allocation remains at 35 per cent.

Benefits

• Ease of choice through automatic rebalancing of asset classes.
• More equity exposure during their working years, leading to a substantial retirement corpus over the long term.

Asset Class-wise distribution of funds under BLC at different ages