What is the story about?
The Pension Fund Regulatory and Development Authority (PFRDA) has constituted a high-level committee on Strategic Asset Allocation and Risk Governance (SAARG) to review and modernise the investment framework of the National Pension System (NPS).
Purpose of the Committee
The SAARG committee has been set up to carry out a comprehensive review of existing NPS investment guidelines. Its key aim is to strengthen the investment structure of NPS to support long-term retirement wealth creation, improve diversification, enhance risk management, and offer more choice to subscribers.
According to PFRDA, the review will include benchmarking NPS investment practices with leading global pension systems and India’s evolving investment ecosystem.
Key Areas Under Review
The committee will examine several aspects of the NPS investment framework, including:
Focus on Subscriber Interests
The committee will also review subscriber investment choices such as lifecycle and target-date funds. It will assess the balance between active and passive investment strategies to improve outcomes for NPS subscribers.
Chairperson and Members
The SAARG committee will be chaired by Narayan Ramachandran, former Country Head and CEO of Morgan Stanley India. The panel includes experts from capital markets, asset management, regulatory bodies and securities law.
Other members include:
Timeline for Recommendations
The committee has been given nine months to complete its review and submit its recommendations to PFRDA.
PFRDA’s Broader Objective
PFRDA said the constitution of SAARG reflects its continued focus on making the NPS investment framework more resilient, diversified and aligned with the long-term needs of subscribers.
Purpose of the Committee
The SAARG committee has been set up to carry out a comprehensive review of existing NPS investment guidelines. Its key aim is to strengthen the investment structure of NPS to support long-term retirement wealth creation, improve diversification, enhance risk management, and offer more choice to subscribers.
According to PFRDA, the review will include benchmarking NPS investment practices with leading global pension systems and India’s evolving investment ecosystem.
Key Areas Under Review
The committee will examine several aspects of the NPS investment framework, including:
- Strategic asset allocation models
- Review and possible expansion of asset classes
- Performance measurement and accountability systems
- Asset–Liability Management (ALM) practices
- Risk management covering market, credit and liquidity risks
- Valuation standards for alternative investments
- Portfolio stability and liquidity optimisation
- Governance structure and intermediary architecture
- Integration of sustainability and climate-related risks
Focus on Subscriber Interests
The committee will also review subscriber investment choices such as lifecycle and target-date funds. It will assess the balance between active and passive investment strategies to improve outcomes for NPS subscribers.
Chairperson and Members
The SAARG committee will be chaired by Narayan Ramachandran, former Country Head and CEO of Morgan Stanley India. The panel includes experts from capital markets, asset management, regulatory bodies and securities law.
Other members include:
- Ananth Narayan, former Whole Time Member, SEBI
- Devina Mehra, Founder and CMD, First Global
- Kalpen Parekh, MD and CEO, DSP Mutual Fund
- Prashant Jain, CIO, 3P Investment Managers
- Rajeev Thakkar, CIO, PPFAS Asset Management
- Raamdeo Agrawal, Co-founder, Motilal Oswal
- Sankaran Naren, CIO, ICICI Prudential AMC
- Sumit Agrawal, Founder, Regstreet Law Advisors
- Ashok Kumar Soni, Executive Director, PFRDA
Timeline for Recommendations
The committee has been given nine months to complete its review and submit its recommendations to PFRDA.
PFRDA’s Broader Objective
PFRDA said the constitution of SAARG reflects its continued focus on making the NPS investment framework more resilient, diversified and aligned with the long-term needs of subscribers.
