The International Financial Services Centres Authority (IFSCA), at its 27th meeting held on 9 February 2026, approved the draft IFSCA (Pension Fund) Regulations, 2026 to establish a comprehensive framework for long-term retirement savings within the IFSC. The proposed regulations aim to create a secure, transparent, and globally competitive pension ecosystem. Pension Fund Managers (PFMs) in IFSC will be permitted to offer voluntary pension schemes to individuals above 18 years, with flexible investment options including Active Choice and Auto Choice (Life-Cycle Fund). A dedicated Healthcare Benefit Option allows allocation of up to 10% of contributions toward medical needs through low-risk instruments. The framework also provides flexible withdrawal, systematic withdrawal plans, deferral up to 75 years, portability, and nomination facilities. Strong governance norms, including mandatory registration, minimum net worth, independent oversight, and a three-lines-of-defence risk framework, are prescribed. PFMs may invest globally, subject to prudential exposure limits.
INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY
PRESS RELEASE
Authority Approves Draft IFSCA (Pension Fund) Regulations, 2026
The 27th meeting of International Financial Services Centres Authority (IFSCA) was held on 9th February 2026. During the meeting, the Authority approved the draft IFSCA (Pension Fund) Regulations, 2026.
The main objective of the pension fund regulations in the IFSC is to establish a robust framework for long-term retirement savings which promotes a secure and transparent environment for subscribers, positioning the IFSC as a global hub for financial services.
Key Features of the Draft Regulations
1. Pension Product for any individual
The proposed framework enables Pension Fund Managers (PFMs) in IFSC to offer voluntary pension schemes to any individual above the age of 18 years, thereby facilitating access to global retirement solutions through IFSC.
2. Voluntary and Flexible Structure
Participation in the pension scheme is entirely voluntary. Investment options include:
Active Choice– allowing subscribers to determine their asset allocation; and
Auto Choice (Life-Cycle Fund)– where asset allocation adjusts automatically based on age.
3. Special Healthcare Benefit Option
The draft Regulations introduce a dedicated Healthcare Benefit Option, permitting allocation of up to 10% of their contributions towards a separate healthcare sub-account.
Key features include:
a) Investment in low-risk, highly liquid instruments
b) Access to funds for medical emergencies or planned healthcare expenses
c) Option at retirement to utilise the balance for health insurance purchase or rollover into the main pension corpus.
4. Flexible Withdrawal and Exit Framework
The Regulations provide for:
a) Partial withdrawals for specified purposes after a lock-in period
b) Systematic Withdrawal Plan (SWP) at retirement
c) Deferral of withdrawal up to 75 years of age
d) Nomination and portability between Pension Fund Managers
5. Strong Governance and Risk Management Standards
The draft framework prescribes:
a) Mandatory registration of PFMs with minimum net worth requirements
b) Board oversight with independent directors
c) Enterprise-wide risk management framework with a three-lines-of-defence model
6. Global Investment Flexibility with Prudential Safeguards
PFMs may invest across equities (domestic and foreign), fixed income instruments, alternative assets, and other permissible assets, subject to defined exposure and concentration limits to ensure prudential risk management.
The introduction of a dedicated pension framework in IFSC marks a significant step towards positioning IFSC as a competitive global hub for retirement solutions and long-term savings products.
The notification will be released in due course on www.ifsca.gov.in
February 12, 2026
GIFT City, Gandhinagar
*****
