The Central Government has taken a big decision for the employees of Central Autonomous Bodies (CABs) associated with the National Pension System (NPS). Now these employees will also get the facility to choose two additional investment options under NPS. Earlier this facility was available only to those central government employees who come under the purview of NPS. The government says that this step will give employees more freedom to invest as per their risk appetite and retirement needs.
The Department of Expenditure of the Finance Ministry has issued an Office Memorandum (OM) in this regard on 1 July 2026. This decision has been taken by expanding the scope of the notification of the Department of Financial Services dated November 13, 2025. Under this, now NPS subscribers of central autonomous institutions will also be able to choose the same investment options, which were earlier available only to central government employees.
The government has made two additional investment options available for CAB employees. The first option is LC-75-High, earlier known as Aggressive Life Cycle Fund. In this option, maximum investment up to 75 percent can be made in equity i.e. stock market. It is considered suitable for those employees who are willing to take higher risks to get higher returns in the long run.
The second option is Aggressive Life Cycle Fund, earlier called Balanced Life Cycle Fund. In this, maximum 50 percent is invested in equity. After the age of 45, the share of equity in it gradually starts decreasing, making the investment relatively safe.
The government says that the purpose of these new options is to provide employees the facility to choose investments according to their financial needs, risk appetite and retirement plan. This will make NPS more flexible and attractive. Employees who are younger and want to invest for a longer period can choose high equity options, while those seeking less risk can go for balanced options.
For those employees who do not want to decide the investment themselves, the option of Auto Choice will also be available in NPS like before. In this facility, the ratio of investment in equity and other asset classes automatically changes according to the age of the investor. Currently, auto choice options like Life Cycle 25 (Low), Life Cycle 50 (Moderate), Life Cycle 75 (High) and Aggressive Life Cycle Fund are available in NPS. The government believes that the new changes will provide the employees of central autonomous institutions the opportunity for better retirement planning.
