New Delhi. The Central Government has taken a big decision for the central employees. The Finance Ministry has approved two new investment options ‘Life Cycle’ and ‘Balanced Life Cycle’ under the National Pension System (NPS) and Unified Pension Scheme (UPS). The move meets a long-standing demand of employees for greater flexibility and choice in pension investments.

Employees will get more flexibility

According to the Finance Ministry, these new options are aimed at giving employees more control and freedom in managing their retirement funds. Now every employee will be able to choose investments as per his risk appetite and financial preferences. This change will help strengthen financial security for government employees after retirement.

Now you will get many investment options

There was already a default option under NPS and UPS, in which investment was as per the guidelines set by the Pension Fund Regulatory and Development Authority (PFRDA). Additionally, Scheme-G option is also available, in which employees can invest 100% of their corpus in government securities. This option is suitable for those seeking low risk and stable returns.

life cycle options

Under the new Life Cycle (LC) option, the proportion of equity investment has been fixed according to the age of the employees.

LC-25: In this, maximum investment of 25% can be made in equity. The proportion of equity gradually decreases from the age of 35 to 55 years.

LC-50: It allows equity investment up to 50%, which reduces with increasing age. This model is beneficial for employees who want stable returns over a long period of time with balanced risk.

Balanced Life Cycle Option

The Balanced Life Cycle (BLC) option is an improved version of the LC-50. In this, equity investment is maintained till the age of 45 years so that the employee can earn profits from the market for a long time. Under this, the facility of equity investment up to 75% is provided in a sub-option called LC-75, which gradually decreases from the age of 35 to 55 years. This plan is suitable for employees who want better long-term returns by taking slightly higher risks.

Big step in the interest of employees

This decision of the government is being considered an important step towards making the pension system more attractive, flexible and modern. This will not only provide more investment options to government employees, but will also make it easier for them to plan their financial future.