Pension New Update: If you are employed and receiving pension benefits, this news may be significant for you. The government has made major changes to the investment rules related to the National Pension System (NPS), Unified Pension Scheme (UPS), and Atal Pension Yojana (APY). The Pension Fund Regulatory and Development Authority (PFRDA) has issued new rules, which are effective immediately. The government says these changes will provide investors with more options and increase the likelihood of better long-term returns.
In a circular issued on December 10, 2025, the PFRDA has made the investment structure of pension schemes more flexible. Deposits under NPS, UPS, and APY will no longer be limited to government bonds and debt. Pension funds will now be able to include new asset classes in their portfolios, such as gold and silver ETFs, Nifty 250 index funds, and alternative investment funds.
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What Changes in the Rules
Under the new rules, pension funds will now be able to invest in SEBI-approved gold and silver ETFs. This investment will fall under the alternative investment category, enhancing portfolio diversification while balancing risk. For government-linked pension funds, the investment limit for gold ETFs and silver ETFs has been set at 1 percent each.
A major change has also been made on the equity investment front. NPS portfolios now allow investments in shares of companies linked to the Nifty 250 index, equity ETFs, and select BSE 250 companies. The maximum limit for total equity investment has been set at 25 percent, which will include all these options. This will increase the share of emerging stock markets and provide the potential for better returns.
In addition, pension funds will now be able to invest in REITs (Real Estate Investment Trusts), InvITs (Infrastructure Investment Trusts), and Category I and II Alternative Investment Funds. However, the limit for total alternative investment has been capped at 5 percent. Strict investment conditions have also been imposed to control risk. For example, total investment in any single industry will not exceed 15%. A limit has also been set on investment in any single corporate group, ensuring a more secure portfolio.
Impact on NPS Investors
These changes will directly impact NPS investors. This scheme will no longer be simply a safe interest-paying scheme, but can also become a long-term investment option with better returns. The addition of assets such as gold, silver, and equities will provide investors with better protection against inflation and increase their chances of receiving a higher pension in the future.