Why in the News?
The Chairperson of the Pension Fund Regulatory and Development Authority announced that the National Pension System (NPS) will raise its equity exposure to 25 percent by FY2027, and that pension funds may begin investing in Alternative Investment Funds (AIFs) by March 2026.
About the National Pension System
- Launched in 2004 for government employees and extended to all citizens in 2009
- Regulated by PFRDA
- Defined contribution pension scheme
- Market-linked returns
- Two types:
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- Tier I: Mandatory retirement account
- Tier II: Voluntary savings account
Key Announcements
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Increase in Equity Exposure
- Equity cap in the Government Composite Scheme raised from 15 percent to 25 percent
- Current equity exposure around 19 percent
- Corporate bond exposure has reduced slightly
- G Sec share remains largely stable
- Objective: Improve long term returns while maintaining prudent risk levels.
- Investment in AIFs: NPS to allow exposure to Alternative Investment Funds (AIFs) by March 2026
-
MARS Committee
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- PFRDA has constituted the Minimum Assured Return Scheme (MARS) committee
- Exploring a pension product offering a guaranteed minimum return
| [2017] Who among the following can join the National Pension System (NPS)?
(a) Resident Indian citizens only (b) Persons of age from 21 to 55 only (c) All State Government employees joining the services after the date of notification by the respective State Governments (d) All Central Government Employees including those of Armed Forces joining the services on or after 1st April, 2004 |
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