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.

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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