The Ministry of Finance has announced the constitution of a high-level committee to review and modernise the investment framework of the National Pension System (NPS), with a focus on long-term retirement wealth creation, diversification, and risk governance.
The committee, titled the Strategic Asset Allocation and Risk Governance (SAARG) group, has been set up by the Pension Fund Regulatory and Development Authority to undertake a comprehensive review of existing NPS investment guidelines for both government and non-government subscribers. The exercise will benchmark India’s pension investment architecture against leading global pension systems and evolving domestic market practices.
According to a Finance Ministry release, SAARG will examine strategic asset allocation frameworks, review existing and potential asset classes, and assess performance measurement and accountability mechanisms under the NPS. The panel will also study asset-liability management practices, valuation standards for alternative investments, portfolio stability, liquidity optimisation measures, and governance structures across NPS intermediaries.
The committee will additionally assess the integration of sustainability considerations, including climate transition risks, into NPS investment decision-making, and review subscriber choice options such as lifecycle and target-date investment structures.
SAARG will be chaired by Narayan Ramachandran, former country head and chief executive officer of Morgan Stanley India, and includes experts from capital markets, asset management, securities law, and pension regulation. The panel has been given a nine-month timeframe to submit its recommendations to the regulator.
The move is aimed at strengthening the resilience of the NPS investment framework and aligning it with long-term retirement objectives amid changing market dynamics and investor needs.
