PFRDA Issues New Investment Rules For Government-Sector Pension SchemesOn December 10, 2025, the Pen...

Rojgar4u Team December 12, 2025

PFRDA Issues New Investment Rules For Government-Sector Pension SchemesOn December 10, 2025, the Pension Fund and Regulatory and Development Authority (PFRDA) released ‘Master Circular on Investment Guidelines issued for government‑sector pension schemes’, including Unified Pension Scheme (UPS), National Pension System (NPS) for Central/State Government subscribers, Corporate Government (CG) NPS, NPS Lite, Atal Pension Yojana (APY), and APY Fund Scheme.

The PFRDA master circular takes effect immediately and replaces the guidelines issued in March 2025.

Pension Fund Investment and Allocation Framework:
Government Securities (G-secs): Pension funds are allowed to invest up to 65% of the portfolio in the G-secs, the safest instruments.
Debt Instruments: Funds may invest up to 45% in corporate bonds and other debt instruments such as infrastructure debt and bank deposits, subject to credit-rating requirements.
Short-term debt instruments: Pension Funds can make investments up to 10% in short term debt instruments like Commercial Paper (CP), Certificate of Deposit (CoD) etc.
Equity Exposure: Equity exposure is capped at 25%, with funds allowed to buy shares through IPOs, FPOs and offers for sale, as well as through index-linked investments.
Asset Backed Funds: A maximum of 5% can be invested in Asset Backed, Trust Structured and Miscellaneous Investments.
Broadened Investment Options: Pension funds (PFs) can now invest in Gold & Silver Exchange-Traded Fund (ETF), Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) (with rating and exposure limits), AAA-rated Municipal Bonds (MBs), and Government Debt ETFs, enhancing diversification, risk management, and liquidity.