The central government has introduced new changes for employees of Central Autonomous Bodies (CABs) covered under the National Pension System (NPS). These employees will now have access to additional investment options, giving them more flexibility to plan their retirement savings according to their risk capacity and financial goals.

Earlier, these investment choices were available only to central government employees under NPS. The latest move expands the same benefits to eligible employees of central autonomous institutions.

Finance Ministry Issues New Order

The Department of Expenditure, Ministry of Finance, issued an Office Memorandum (OM) on July 1, 2026, expanding the investment options available under NPS.

The decision follows the Department of Financial Services’ notification issued on November 13, 2025, and allows CAB employees to select investment patterns similar to those already available to central government NPS subscribers.

Two New Investment Options Added

The government has introduced two additional choices for CAB employees:

1. LC-75 (High) Option

Previously known as the Aggressive Life Cycle Fund, this option allows up to 75% investment in equities (stock market-related assets).

This option may suit employees who:

• Have a longer investment horizon
• Can tolerate market fluctuations
• Want higher growth potential over the long term

Since equity investments carry higher market risk, returns are not guaranteed.

2. Aggressive Life Cycle Fund

Previously known as the Balanced Life Cycle Fund, this option allows investment of up to 50% in equities.

Under this option:

• Equity exposure gradually reduces after the age of 45
• The portfolio becomes more conservative over time

It is designed for investors who want a balance between growth and risk management.

More Freedom for Retirement Planning

The government says these changes will make NPS more flexible by allowing employees to select investments based on:

• Risk appetite
• Retirement goals
• Investment timeline
• Financial requirements

Younger employees with many years before retirement may prefer higher equity exposure, while those seeking stability may choose balanced options.

Auto Choice Option Continues

Employees who do not want to actively manage their investment choices can continue using the Auto Choice facility.

Under this option, NPS automatically adjusts the allocation between equity and other asset classes based on the subscriber’s age.

Available Auto Choice options include:

• Life Cycle 25 (Low)
• Life Cycle 50 (Moderate)
• Life Cycle 75 (High)
• Aggressive Life Cycle Fund

What This Means for NPS Subscribers

The new rules provide central autonomous body employees with more control over their retirement investments. While higher equity exposure can offer better long-term growth potential, it also comes with increased market risk. Subscribers should choose an option based on their age, financial goals, and ability to handle market ups and downs