Raise equity allocation if you have the risk appetite

PFRDA's proposal to raise equity exposure in the active-choice option of NPS will benefit young investors, provided they can stomach higher volatility

The Pension Fund Regulatory and Development Authority (PFRDA) has floated a concept paper, in which it has proposed raising equity allocation under the active-choice option of the National Pension System (NPS) to 75 per cent from the current limit of 50 per cent.

At present, the PFRDA allows investors to allocate up to 75 per cent in equities in the auto-choice option. Experts say once implemented, this measure will enable younger investors who make an early start in the NPS to gather a larger retirement corpus.

The NPS offers two choices to investors: Active choice and auto choice. They can