New Delhi: The Central government has introduced new investment options for its employees under the National Pension System (NPS) and the Unified Pension Scheme (UPS). These new options — Life Cycle 75 (LC-75) and Balanced Life Cycle (BLC) — will allow government employees to take higher exposure to equity investments, similar to private sector subscribers.
Until now, central government employees could invest only up to 50 percent of their pension contributions in equities. With this update, they can now allocate up to 75 percent of their pension corpus to equity through the LC-75 option. This is a major step toward offering flexibility and better long-term returns for government staff.
The LC-75 plan is designed for younger investors who are comfortable taking higher risks for better growth. Under this plan, the equity allocation starts at 75 percent at age 35 and gradually reduces to 15 percent by age 55. This automatic adjustment helps balance growth and safety as employees near retirement.
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The Balanced Life Cycle (BLC) option, on the other hand, allows employees to remain invested in equities for a longer period. It starts reducing the equity portion from age 45 instead of 35. This means investors who want to stay exposed to the stock market for a longer duration — and potentially earn higher returns — can opt for this plan.
Both these options are voluntary. Employees can choose between them based on their risk appetite, financial goals, and comfort level with market fluctuations.
Officials said this reform aims to bring parity between government and private sector employees in terms of pension investment flexibility. The move is also expected to encourage more active participation in the NPS and UPS, helping employees grow their retirement savings more efficiently.
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