In a very important step that promises to significantly improve the retirement planning process for central government employees, the government of India has granted the approval for two new investment options—LC75 (Life Cycle 75) and BLC (Balanced Life Cycle)—for the National Pension System (NPS) and Unified Pension Scheme (UPS). The options are more aggressive in terms of equity and also offer more flexibility in asset allocation which has the potential to boost retirement savings.
What’s Up with LC75 and BLC?
- LC75 (Life Cycle 75): It permits a maximum of 75% equity allocation during the initial period of the employee’s service. When the person becomes older, the equity part will slowly decrease and be converted to safer assets like bonds and government securities.
- BLC (Balanced Life Cycle): It presents a less aggressive combination of equities, corporate bonds, and government securities all through the career. The equity stakes start at 50% and reduce to 35% by 55 years of age.
The options incorporate a “glide path” technique, which shifts the risk levels according to age automatically.
Central Government Employees Why This Matters
Before, Central Government subscribers had very little room for investment in comparison to private sector NPS users. With the approval of LC75 and BLC, the employees can now:
- Go for high-return equity options
- Make their own retirement portfolio
- Match investments with individual risk tolerance
This entire modification is a reply to the endless calls for equal treatment in pension fund selections.
Investment Options Comparison
| Option | Max Equity | Risk Level | Ideal For |
|---|---|---|---|
| LC75 | 75% | High | Young employees, growth focus |
| BLC | 50%–35% | Moderate | Balanced investors |
| LC50 | 50% | Moderate | Default NPS option |
| Scheme G | 0% | Low | Conservative investors |
How to Opt In
LC75 and BLC are the investment options that have been made available for selection through the following channels:
- NPS portal (CRA login)
- Employer’s HR department
- Pension fund manager selection tools
It is a good idea to look into fund performance and risk profile before making any changes.
Final Thoughts
The introduction of LC75 and BLC options represents a significant change to the way that central government employees plan for their retirement. Employees will surely have better control of their exposure to equity and thus the growth of their retirement corpus. It is wise for employees to reevaluate their goals and make informed decisions that will provide them with the maximum long-term benefits.