New Delhi, Jan 25 (NationPress) The Pension Fund Regulatory and Development Authority (PFRDA) has established a committee comprising investment specialists for Strategic Asset Allocation and Risk Governance (SAARG) with the goal of reviewing, recommending, and modernizing the investment framework associated with the National Pension Scheme (NPS), as announced on Sunday.

As per the Finance Ministry, the committee is charged with conducting a thorough assessment of the current NPS investment guidelines, comparing them with top global pension systems and the dynamic Indian investment landscape.

“The aim is to bolster the investment architecture of NPS to facilitate long-term retirement wealth accumulation, enhance diversification, improve risk management practices, and broaden subscriber choices,” stated the ministry.

SAARG will be led by Narayan Ramachandran, the former Country Head and CEO of Morgan Stanley India. It will also include distinguished professionals from capital markets, asset management, and securities law sectors. The committee has a nine-month timeframe to analyze and present its findings to PFRDA.

According to the ministry, the committee's scope includes assessing strategic asset allocation frameworks, evaluating and introducing asset classes, measuring performance, establishing accountability mechanisms, improving asset-liability management practices, setting valuation standards for alternative investments, ensuring portfolio stability, optimizing liquidity, developing governance structures, and incorporating sustainability into investment decisions.

The formation of SAARG underscores PFRDA’s ongoing commitment to advancing the NPS investment framework in a progressive manner, ensuring it remains resilient, diversified, and aligned with subscribers' evolving long-term wealth creation needs.

The committee will assess existing NPS investment guidelines for both Government and Non-Government sectors, focusing on their adequacy, effectiveness, and long-term relevance. It will benchmark the NPS investment architecture against leading global pension systems and the Indian investment ecosystem, recommending necessary reforms.

Additionally, it will review all approved asset classes and propose enhancements aimed at improving diversification and long-term retirement wealth accumulation, including the introduction of new asset classes to mitigate geopolitical, macroeconomic, and market-cycle risks.

The committee will also recommend optimal strategic asset allocation across equity, debt, money market, and alternative assets, balancing safety, liquidity, and returns, while defining eligible investment universes under each asset class and suggesting prudent exposure and concentration limits.

Furthermore, it will review and enhance existing subscriber investment options, including lifecycle and target-date structures, and recommend the optimal mix of active and passive investment strategies.