The Pension Fund Regulatory and Development Authority (PFRDA) has constituted a high-level committee of investment experts to undertake a comprehensive review of the investment framework under the National
Pension System (NPS), with an aim to strengthen long-term retirement wealth creation, improve risk governance and expand subscriber choice.
The committee, named the Strategic Asset Allocation and Risk Governance (SAARG), will review existing NPS investment guidelines and recommend reforms aligned with global best practices and the evolving Indian investment ecosystem, according to a statement issued by PFRDA on Saturday.
The SAARG will be chaired by Narayan Ramachandran, former Country Head and CEO of Morgan Stanley India and currently Chairman of TeamLease Services. The panel includes senior market veterans from capital markets, asset management, regulation and securities law.
Among its members are former SEBI whole-time member Ananth Narayan, First Global founder Devina Mehra, DSP Mutual Fund MD & CEO Kalpen Parekh, veteran fund manager Prashant Jain, PPFAS CIO Rajeev Thakkar, Motilal Oswal co-founder Raamdeo Agrawal, ICICI Prudential AMC CIO Sankaran Naren, Regstreet Law Advisors founder Sumit Agrawal, and PFRDA Executive Director Ashok Kumar Soni.
What will the committee do?
The SAARG has been tasked with reviewing NPS investment norms for both government and non-government sectors, benchmarking them against leading global pension systems, and suggesting reforms to modernise the investment architecture. Its mandate includes improving diversification, strengthening risk management practices and supporting long-term pension outcomes.
Key areas under review include strategic asset allocation across equity, debt, money market and alternative assets; introduction of new asset classes to mitigate macroeconomic and geopolitical risks; performance benchmarking and accountability of pension funds; and asset–liability management aligned with long-term pension obligations.
The committee will also examine valuation norms for alternative investments, portfolio stability and liquidity measures such as held-to-maturity government securities, securities lending and borrowing, and triparty repo arrangements. Governance issues, including custodial architecture and the role of NPS intermediaries, will also be reviewed.
In addition, SAARG will assess how sustainability considerations, including climate transition risks and net-zero pathways, can be integrated into NPS investment decisions. Enhancing subscriber choice through improved lifecycle funds, target-date strategies, and an optimal mix of active and passive investments is also part of its mandate.
Timeline
The committee has been given nine months to complete its review and submit its recommendations to PFRDA.
According to the regulator, the constitution of SAARG reflects its commitment to ensuring that the NPS investment framework remains resilient, forward-looking and aligned with the long-term wealth creation needs of subscribers.
