In a key development for civil‑service retirement planning, the Government of India has approved the extension of the Life Cycle 75 (LC75) and Balanced Life Cycle (BLC) investment options to central government employees under the National Pension System (NPS) and the Unified Pension Scheme (UPS). This move enhances the range of investment choices available, aligning the government‑employee pension ecosystem more closely with options already available to non‑government subscribers.
What the Extension Means
Under the revised framework for NPS and UPS, central government employees now have access to multiple investment choice paths,
- The Default Option, which follows the investment pattern defined by the Pension Fund Regulatory and Development Authority (PFRDA).
- Scheme G, where 100 per cent of investment goes into government securities—considered a low‑risk, fixed‑return option.
- LC‑25, capping equity allocation at 25 per cent with gradual tapering from age 35 to 55.
- LC‑50, with up to 50 per cent equity allocation, similarly tapering from age 35 to 55.
- BLC (Balanced Life Cycle), a modified version of LC‑50, where equity exposure starts tapering from age 45, allowing longer participation in equities.
- LC‑75, the new aggressive option for those comfortable with greater equity exposure—up to 75 per cent equity allocation, tapering from age 35 to 55.
Enhanced Flexibility & Choice
- Central government employees previously had fewer investment path options compared to non‑government subscribers.
- With the addition of LC75 and BLC, employees can now match their retirement corpus strategy more closely with their individual risk‑return preferences and timeline.
Glide‑Path Mechanism
- The newly available options incorporate a glide‑path mechanism, meaning that the equity exposure gradually decreases as the subscriber approaches retirement.
- For example, in LC75 the maximum equity allocation reduces over time, helping protect the corpus from market volatility as age advances.
Broader Auto‑Choice Options
- These additional options broaden the “Auto Choice” portfolio set. Auto Choice means a pre‑defined investment strategy tailored by age or risk profile, helping employees who may not wish to actively select their asset allocations.
Benefits for Employees & the Pension System
For employees, this expansion brings several distinct advantages,
- The ability to customise their retirement savings instead of being restricted to a default life‑cycle formula.
- Opportunity to participate more aggressively in equities early in their career if they are comfortable with higher risk (via LC75).
- Option to remaining invested in equities longer (via BLC) if they believe in a longer horizon for returns.
- Greater alignment between investment strategy and individual retirement timelines and financial goals.
- From a system perspective, offering more choices may help in improving employee engagement with pension planning and aligning contributions with actual risk appetites, which in turn may enhance long‑term retirement outcomes.
Key Takeaways
- The extension of LC75 and BLC investment options to central government employees is a significant enhancement of retirement‑planning flexibility under NPS and UPS.
- The Government approved this extension in October 2025.
- LC75 allows up to 75 per cent equity allocation, tapering from age 35 to 55.
- BLC allows longer equity exposure than LC‑50, with tapering starting at age 45.
- Other available options include Default, Scheme G (100 per cent government securities), LC‑25 (25 per cent equity cap) and LC‑50 (50 per cent equity cap).
- The move aligns pension choices with individual risk appetite, horizon, and the broader objective of improving retirement outcomes.