NPS Rule Change: Autonomous Body Employees Get 2 New Investment Options; Know Key Benefits

The Central Government has announced a major reform under the National Pension System (NPS), offering employees of Central Autonomous Bodies (CABs) greater flexibility in planning their retirement. The Ministry of Finance has approved two additional investment options, allowing eligible employees to select investment strategies based on their risk appetite and long-term financial goals.

The move extends benefits that were earlier available only to Central Government employees and is expected to help lakhs of NPS subscribers build a stronger retirement corpus.

Government Expands NPS Investment Choices

The Department of Expenditure under the Ministry of Finance has extended the provisions of the Department of Financial Services (DFS) notification dated November 13, 2025, to employees of Central Autonomous Bodies covered under the National Pension System.

With this decision, CAB employees will now have access to two additional investment models that offer higher equity exposure and greater flexibility in retirement planning.

Two New NPS Investment Options Explained

1. LC-75 High (Aggressive Life Cycle Fund)

The LC-75 High option is designed for younger employees with a higher risk appetite.

Key Features:

Up to 75% investment in equity

Suitable for long-term wealth creation

Higher growth potential over the investment period

Ideal for employees seeking better returns before retirement

2. Aggressive Life Cycle Fund (Earlier Balanced Life Cycle Fund)

This option is meant for investors looking for a balanced approach between risk and stability.

Key Features:

Maximum 50% equity exposure

Equity allocation gradually reduces after the subscriber turns 45 years old

Helps protect retirement savings as retirement approaches

Suitable for moderate-risk investors

Major Benefits for Employees

The latest NPS reform offers several advantages to employees of Central Autonomous Bodies:

Greater flexibility in selecting investment strategies

Opportunity to earn higher long-term returns through increased equity allocation

Investment options based on individual risk tolerance

Better retirement planning and wealth creation

Automatic reduction in equity exposure with age under life-cycle funds

Implementation Process

The Ministry of Finance has instructed all administrative ministries and departments to inform the Central Autonomous Bodies under their control about the newly approved investment options.

After the notification is implemented by their respective employers, eligible employees will be able to select their preferred investment option under the National Pension System.

Why This NPS Reform Matters

The government believes that providing more investment choices will make the National Pension System more attractive for employees while helping them build a larger retirement corpus.

Employees who are comfortable with market-linked investments can now opt for higher equity exposure, while conservative investors can continue with balanced investment strategies that reduce risk as retirement nears.

The reform is expected to modernize pension planning for Central Autonomous Body employees by offering greater control, flexibility, and long-term wealth creation opportunities under the NPS framework.