To enable better performance, the pension fund regulatory body PFRDA has allowed certain changes in some of the NPS schemes, whereby the investment limit for debt funds has been increased in respect of some.
"To provide flexibility to the pension funds to improve the scheme performance depending upon the market condition, it has been decided to increase the cap on Government Securities and related investments and short-term debt instruments and related investments by 5 percent each," .. states a Pension Fund Regulatory and Development Authority (PFRDA) circular dated March 25, 2019.
To which NPS schemes the new changes apply:
Notably, the changes that will come into force from April 1, 2019 will be applicable in case of Central Government scheme (CG), State Government scheme (SG), Corporate Central Government (CG) scheme, Lite schemes of NPS, and Atal Pension Yojana.
And the revision in respect of the investment in different asset classes has been given as under:
|Asset class||Current limit on investment||Revised limit effective from April 1, 2019|
|G-securities and related investments||Up to 50%||Up to 55%|
|Debt instruments and related investments||Up to 45%||Up to 45%|
|Equity and related investments||Up to 15%||Up to 15%|
|Asset backed, trust structured etc.||Up to 5%||Up to 5%|
|Short term debt instruments and related investments||Up to 5%||Up to 10%|
The changes have been effected so as to bring in stability in returns from the investment over the long run.