The Central Government has given a big good news to lakhs of employees associated with the National Pension System (NPS). Making a major change in the rules related to pension, the government has introduced two new and excellent investment options for the employees working in Central Autonomous Bodies (CABs). Till now, these special facilities were available only to the direct employees of the Central Government, but now their scope has been extended to autonomous bodies also. The Department of Expenditure of the Finance Ministry has issued official instructions in this regard.
What are these two new investment options?
These two new options introduced by the government will help employees to manage their pension investments better.
The first is ‘LC-75 High’ (Aggressive Life Cycle Fund), which is designed for employees who can afford to take some risk to get better returns in future. In this, up to 75 percent of the amount can be invested in the stock market (equity) in the initial years, due to which there is a possibility of rapid growth of the fund in the long term.
Another option is the ‘Balanced Life Cycle Fund’, which is great for employees who want stability in their investments. In this, the equity limit has been limited to 50 percent. The special thing is that as the age of the employee exceeds 45 years, the equity portion in it is gradually reduced, so that your money remains safe at the time of retirement.
Employees will have flexibility in investment
The biggest advantage of this decision is that now employees will no longer have the compulsion of ‘one-size-fits-all’. Every employee’s financial situation, risk appetite and retirement goals are different. With the advent of these new options, you will now be able to choose funds according to your needs. If you want more growth, then you can choose ‘LC-75 High’, and if you prefer safe investments, then ‘Balanced Life Cycle Fund’ is best for you.
Who will get its benefit?
This big relief is for all those employees who are working in Central Autonomous Bodies (CABs) and are members of NPS. The options which earlier were only the domain of Central Government employees, have now been opened to the employees of all eligible autonomous institutions also. This move by the government will not only make NPS more attractive than before, but it will also strengthen the long-term financial security of the employees.
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