What Are The Investment Options Under NPS?

While subscribing to the CRA system under NPS, an NPS subscriber must select a Pension Fund Manager (PFM) as well as a scheme type. The subscribers have a number of alternatives from which to pick. Multiple PFMs, investment choices (Auto or Active), and four asset classes (Equity, Corporate Bond, Government Bond, and Alternative Infrastructure Funds) are available in NPS. A subscriber is first required to select a PFM and then choose from one of the following scheme options.

Pension Fund Managers Under NPS

The subscriber must first select one PFM from the below list:

• Birla Sun Life Pension Management Limited
• HDFC Pension Management Company Limited
• ICICI Prudential Pension Funds Management Company Limited
• Kotak Mahindra Pension Fund Limited
• LIC Pension Fund Limited
• SBI Pension Funds Private Limited
• UTI Retirement Solutions Limited

NPS Investment Options

The National Pension System (NPS) gives investors two options i.e. Auto Choice and Active Choice for investing in four asset classes: equities, government securities, corporate debt, and alternative investment funds (AIFs).

Active Choice Option In NPS

Based on your risk behaviour and personal preferences, you can allocate the funds according to your choice. The PFM, Asset Class, and per cent of allocation in each scheme of the PFM can be specified by the subscriber according to his or her choice. Under this option, there are four asset classes: equity, corporate debt, government bonds, and alternative investment funds, from which the allocation must be stated under a single PFM.

• Asset class E - Equity and related instruments
• Asset class C - Corporate debt and related instruments
• Asset class G - Government Bonds and related instruments
• Asset Class A - Alternative Investment Funds including instruments like CMBS, MBS, REITS, AIFs, Invlts etc.

NPS subscribers can choose multiple Asset Class under a single PFM using the active choice option, as shown below:

• Up to the age of 50, you can invest up to 75 per cent of your overall asset allocation in equity.
• For Alternative Investment Funds, the percentage contribution value should not exceed 5%.
• The overall allocation throughout E, C, G, and A asset classes should be 100%.

Equity Allocation Matrix for Active Choice

The maximum allowed equity investment will be determined by the equity allocation matrix described below. The equity allocation will go down according to the subscriber's age.

Age (years)	Max. Equity Allocation
Up to 50	75%
51	72.50%
52	70%
53	67.50%
54	65%
55	62.50%
56	60%
57	57.50%
58	55%
59	52.50%
60 & above	50%
Source: npscra.nsdl.co.in

Auto Choice Option Under NPS

NPS provides another option for members who have less exposure to equity investments. In case of less asset allocation knowledge, a subscriber can select the Auto Choice option. Under this option, investments will be made in a life-cycle fund. A predefined portfolio will decide the portion of contribution invested throughout three asset classes in this option. At the earliest age of registration (18 years), the auto choice will include investing 50% of pension money in E Class, 30% in C Class, and 20% in G Class. Under this choice, the CRA system will select the scheme as well as the allocation ratio depending on the age of the Subscriber at the time of registration. Individuals' presence in equity and corporate debt appears to decline as they become older. There are three alternative alternatives accessible inside 'Auto Choice' based on the risk tolerance of the Subscriber - Aggressive, Moderate, and Conservative. The following funds are described in-depth:

LC75 - Aggressive Life Cycle Fund

This Life cycle fund allows for an equity investment cap of 75% of total assets. The equity investment exposure begins at 75% till the age of 35 and subsequently decreases according to the subscriber's age.

Age	Asset Class E	Asset Class C	Asset Class G
Up to 35 years	75	10	15
36 years	71	11	18
37 years	67	12	21
38 years	63	13	24
39 years	59	14	27
40 years	55	15	30
41 years	51	16	33
42 years	47	17	36
43 years	43	18	39
44 years	39	19	42
45 years	35	20	45
46 years	32	20	48
47 years	29	20	51
48 years	26	20	54
49 years	23	20	57
50 years	20	20	60
51 years	19	18	63
52 years	18	16	66
53 years	17	14	69
54 years	16	12	72
55 years & above	15	10	75

LC50 - Moderate Life Cycle Fund

This Life cycle fund allows for an equity investment cap of 50% of total assets. The equity investment exposure begins at 50% till the subscriber is 35 years old and subsequently decreases as the subscriber's age increases.

Age	Asset Class E	Asset Class C	Asset Class G
Up to 35 years	50	30	20
36 years	48	29	23
37 years	46	28	26
38 years	44	27	29
39 years	42	26	32
40 years	40	25	35
41 years	38	24	38
42 years	36	23	41
43 years	34	22	44
44 years	32	21	47
45 years	30	20	50
46 years	28	19	53
47 years	26	18	56
48 years	24	17	59
49 years	22	16	62
50 years	20	15	65
51 years	18	14	68
52 years	16	13	71
53 years	14	12	74
54 years	12	11	77
55 years & above	10	10	80

LC25 - Conservative Life Cycle Fund

This Life cycle fund allows for an equity investment maximum of 25% of total assets. The equity investment exposure begins at 25% till the age of 35 and subsequently decreases as the subscriber's age increases.

Age	Asset Class E	Asset Class C	Asset Class G
Up to 35 years	25	45	30
36 years	24	43	33
37 years	23	41	36
38 years	22	39	39
39 years	21	37	42
40 years	20	35	45
41 years	19	33	48
42 years	18	31	51
43 years	17	29	54
44 years	16	27	57
45 years	15	25	60
46 years	14	23	63
47 years	13	21	66
48 years	12	19	69
49 years	11	17	72
50 years	10	15	75
51 years	9	13	78
52 years	8	11	81
53 years	7	9	84
54 years	6	7	87
55 years & above	5	5	90

How to change Auto/Active Choice in NPS?

To change your Auto or Active Choice option under NPS, you can follow the steps listed below:

• Visit www.cra-nsdl.com and sign in to your account using your User ID and IPIN.
• Now click on 'Transact Online' and select 'Change Scheme Preference'
• Now select your 'Tier Type' for which you want to make changes.
• Now choose the 'Scheme-preference type' and submit.
• Now select 'Scheme Preference Change' and select your scheme preference type as Active or Auto.
• Now click on 'Submit' and a confirmation screen will appear.
• Now click on 'Send OTP' and you will get an OTP on your registered mobile number.
• Enter the received OTP and click on Submit OTP.
• Once the OTP is verified, an Acknowledgement number will be displayed on your screen.