The Pension Fund Regulatory and Development Authority (PFRDA) has rationalized the names and structure of the Auto Choice / Life Cycle (LC) Funds under the National Pension System (NPS). This initiative aims to ensure the fund names accurately reflect their investment patterns and risk-return profiles, addressing inconsistencies such as the Balanced Life Cycle Fund (BLC) having a higher equity allocation at certain ages than the LC 75 Fund, categorized as Aggressive. The BLC has now been integrated into the Auto Choice category, and the remaining LC fund names have been revised for simplicity, transparency, and uniformity. This allows subscribers to make better-informed investment decisions based on their risk appetite and retirement goals. PFRDA is also introducing a new nomenclature where both Auto Choice and Active Choice are now referred to as Common Schemes (CS), as per the Circular dated September 16, 2025. Under the Multiple Scheme Framework (MSF), subscribers gain the flexibility to invest across multiple schemes offered by different Pension Funds and to invest in multiple CS under their Permanent Retirement Account Number (PRAN). This entire exercise is intended to clearly convey the funds’ underlying risk characteristics by differentiating the growth categories.
PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
Rationalization of Names and Structure of Auto Choice / Life Cycle Funds under NPS
PFRDA has reviewed the existing Auto Choice / Life Cycle (LC) Funds under the NPS to ensure better alignment between the names of the funds and their actual investment patterns.
The Balanced Life Cycle Fund (BLC) had a higher equity allocation at the ages of 45 and 55 years as compared to the LC 75 Fund, which is currently categorized as an Aggressive investment pattern. To address this inconsistency and enhance clarity for subscribers, PFRDA has decided to revise and rationalize the nomenclature of the Life Cycle Funds so that the names accurately reflect their risk–return profiles and equity allocation patterns.
Key Highlights
- The Balanced Life Cycle Fund (BLC) has been incorporated within the Auto Choice category.
- The names of the existing Life Cycle Funds have been rationalized as per the framework provided in below in the table.
- The revised names have been designed for simplicity, transparency, and uniformity, enabling subscribers to make informed investment choices based on their risk appetite and retirement goals.
- It may further be noted that the existing investment options under NPS — namely, Auto Choice and Active Choice — shall henceforth be referred to as Common Schemes (CS), in accordance with PFRDA’s Circular dated 16th September 2025. Under the Multiple Scheme Framework (MSF), subscribers under their PRAN shall have the flexibility not only to invest across multiple schemes of one or more Pension Funds but also to invest in multiple CS.
For the convenience of all stakeholders and subscribers, the details of the revised names and their respective risk profiles are provided below.
(Growth is presented in four differentiated categories to clearly convey the underlying risk-return characteristics, there enabling subscribers to make informed decisions in planning their retirement journey)
