Change in investment guidelines for NPS schemes w.r.t. investment in equity mutual funds by pension funds

Change in investment guidelines for NPS schemes w.r.t. investment in equity mutual funds by pension funds

PFRDA has changed the investment guidelines for NPS schemes with respect to investment in equity mutual funds by pension funds. This article talks about various changes brought out by PFRDA today.


The changes are as follows:

1) A limit of 5 percent has been prescribed on investment in equity mutual funds in a manner that the aggregate portfolio invested in such mutual funds shall not be in excess of 5 percent of the total portfolio of the fund at any point in time and the fresh investment in such mutual funds shall not be in excess of 5 % of the fresh accretions invested in the year.

2) The amount of investment in any mutual funds mentioned in any of the categories or exchange traded funds or index funds made by pension funds through professional fund/asset managers shall be excluded for the purpose of computing their investment management fee.

3) While investing in mutual funds, exchange traded funds and index funds, the underlying scrips of these mutual funds or index funds should also comply with the stipulations for investments in equity directly i.e. shares of body corporate of listed on BSE or NSE, which have:

a. Market Capitalization of not less than Rs. 5000 crore as on the date of investment and
b. Derivatives with the shares as underlying traded in either of the two stock exchanges

For more details, please go through the following circular:


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