Central Government approves 2 new investment options – Learn about it

The Central Government has green signaled for two new investment options, which will work in favour of central government employees. Amid the discussions about National Pension Scheme and Unified Pension Scheme, this significant news has arrived. What are the two new investment 5, who will it help the employees? Let’s know about it in depth.

Two new investment options

The government has approved two new investment options—”Life Cycle” and “Balanced Life Cycle”—for central government employees under the National Pension System (NPS) and the Unified Pension Scheme (UPS). The Finance Ministry stated that these options have been designed to increase flexibility in retirement planning and allow employees to manage their retirement funds according to personal preferences. This decision fulfills a long-standing demand of central government employees, who had demanded that they be given more investment options under these pension schemes, similar to those available to non-government employees.

Who will be able to invest

Under NPS and UPS, central government employees can now choose from several investment options. One is the default option, which is the ‘default pattern’ of investment as defined by the Pension Fund Regulatory and Development Authority (PFRDA) from time to time. The second option is Scheme-G, which invests 100 percent in government securities for low-risk, assured returns. It is worth noting that NPS was launched in 2004, while UPS was approved by the central government in 2004. UPS was approved from April 2025. The Life Cycle (LC-25) option has a maximum equity allocation of 25 percent, which gradually reduces from age 35 to age 55, while the LC-50 option has a maximum equity allocation limited to 50 percent of the retirement corpus.

What is Balanced Life Cycle

Similarly, the Balanced Life Cycle (BLC) option is a modified version of the LC50, where the equity allocation reduces from age 45 to enable employees to invest in equities for a longer period. The LC75 option has a maximum equity allocation of 75 percent, which gradually reduces from age 35 to age 55.