These funds are widely accepted by private sector subscribers under NPS. About 65 percent of private sector subscribers chose Life Cycle Funds among various investment options.
Currently, there are three types of Life Cycle Funds under NPS:-
Equity share starts decreasing after 35 years till 55 years of age.
A balanced life cycle fund
The Pension Fund Regulatory & Development Authority (PFRDA) has launched another Life Cycle Fund called “Balanced Life Cycle Fund (BLC)”.
The fund is a predetermined combination of equity and debt that balances aging risk and market risk to maximize returns.
Eligibility
Available to subscribers in the private sector (Citizens and Companies Model).
Features
- Up to 50 percent of the budget is saved for up to 45 years.
- The reduction of equity share starts from 45 years, instead of 35.
- At age 55, the equity share remains at 35 percent.
Benefits
- Easy selection with automatic rebalancing of asset classes.
- More equity exposure during their working years, leading to a bigger retirement corpus in the long run.
Class wise distribution of funds under BLC in different years
