NPS: Through Balanced Life Cycle Fund (BLS), NPS members will now be able to invest 50% of their total contribution in equity till the age of 45. This will give them an opportunity to earn more profits in a safe manner.
NPS: Pension Fund Regulatory and Development Authority (PFRDA) has launched a new investment fund for NPS members. It has been named Balanced Life Cycle Fund (BLS). Through this, NPS members will now be able to invest 50% of their total contribution in equity till the age of 45 years. This will give them an opportunity to earn more profits in a safe manner.
According to a recent circular issued by PFRDA, this investment fund has been specially designed for private sector customers. This will provide them with more options for balanced investment. Employees who open corporate NPS account through the company and common citizens who open individual accounts will get an opportunity to invest in this fund.
What is the current system
At present, investments are made in equity, government securities, corporate bonds and other alternative funds. Members are allowed to invest up to 50 per cent in equity till the age of 35 in the LC-50 option under the Auto Choice Fund. In the new BLC fund, now more money can be invested in equity till the age of 45.
Conservative Fund (LC-25)
25 Allocation to Equity
Moderate Fund (LC-50)
Allocation to 50% Equity
Aggressive Fund (LC-75)
Allocation to Equity 75%
Balanced Fund- 50% allocation to equity till the age of 45
1. Active Choice Fund
In this fund, the investor can invest a maximum of 75% of his contribution in equity till the age of 50. The remaining 25% has to be allocated in government securities, corporate bonds and alternative investment funds. After this, the equity allocation is reduced to 50% at the age of 60.
2. Auto Choice Option
This option is also known as Life Cycle Fund (BLC). In this, the investor gets three options, in which investment is made in equity based on risk till the age of 35 years. A new fourth option has been added to this.
Government employees will also be able to avail the benefits
The Integrated Pension Scheme can also be availed by risk-taking government employees who wish to earn higher returns without a guaranteed pension at the rate of 50% of the average salary of the last 12 months of service. Customers who choose default investment will get a guaranteed pension.
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