Investment Options

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Active Choice : The subscriber will have the option to actively decide as to how the NPS pension wealth is to be invested in three asset classes:

1. Asset Class E : Investment would primarily in Equity market instruments. It would invest in Index funds that replicate the portfolio of either BSE Sensitive index or NSE Nifty 50 index. An investor can invest upto a maximum 50% of the contributions in this class.

2. Asset Class C : Investment would be in fixed income securities other than Government Securities

3. Asset Class G : Investment would be in Government securities like GOI bonds and State Govt. bonds

Auto Choice : In case the subscriber does not exercise any choice as regards asset allocation, the contribution will be invested in accordance with the ‘Auto choice’ option. In this option the investment will be determined by a predefined portfolio. At the lowest age of entry (18 years) the auto choice will entail investment of 50 % of pension wealth in “E” Class, 30% in “C” Class and 20% in “G” Class. These ratios of investment will remain fixed for all contributions until the participant reaches the age of 36. From age 36 onwards, the weight in “E” and “C” asset class will decrease annually and the weight in “G” class will increase annually till it reaches 10% in “ E”, 10% in “C” and 80 % in “ G” class at age 55 as in the Table below :

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 10 % 10% 80%


The permitted fraction, as mentioned above, is expected to be maintained at that level at all points in time. However, the amount of funds invested in that asset can differ from the Specified weight by no more or less than 5% for purposes of portfolio balancing.