In a major step towards strengthening India’s pension ecosystem, the Pension Fund Regulatory and Development Authority (PFRDA) has constituted a high-level committee titled Strategic Asset Allocation and Risk Governance (SAARG) to review and modernise the investment framework of the National Pension System (NPS).
Announced on 25 January 2026, the committee has been tasked with undertaking a comprehensive review of NPS investment guidelines, benchmarking them against leading global pension systems and the evolving Indian investment landscape. The objective is to enhance long-term retirement wealth creation, improve diversification, strengthen risk management, and expand investment choices for NPS subscribers.
Strengthening the Investment Architecture of NPS
The formation of SAARG reflects PFRDA’s intent to future-proof the NPS investment framework in line with global best practices. As NPS assets and subscriber base continue to grow, a robust and well-governed investment architecture is essential to manage long-term pension liabilities while delivering stable, risk-adjusted returns.
The committee will examine both Government and Non-Government sector NPS investment guidelines to assess their adequacy, effectiveness, and long-term relevance.
Wide-Ranging Mandate for Holistic Reform
SAARG’s scope of work covers a broad range of critical investment and governance areas, including:
Strategic asset allocation frameworks across equity, debt, money market and alternative assets
Introduction and review of asset classes to improve diversification and mitigate macroeconomic and geopolitical risks
Performance measurement and accountability mechanisms for Pension Funds
Risk management practices, covering market, credit, liquidity, concentration and operational risks
Asset–Liability Management (ALM) aligned with long-term pension obligations
Valuation standards and investment strategies for Alternative Investment Funds (AIFs)
Portfolio stability and liquidity optimisation, including the feasibility of holding a portion of government securities under Held-to-Maturity (HTM)
Examination of Securities Lending and Borrowing Mechanism (SLBM) and Triparty Repo for efficient liquidity management
Governance and intermediary architecture, including custodial structures and end-to-end investment processes
Integration of sustainability and climate transition risks into investment decision-making
Enhancement of subscriber choice, including lifecycle funds, target-date strategies, and the optimal mix of active and passive investments
Expert-Led Committee with Strong Market Representation
The SAARG committee will be chaired by Shri Narayan Ramachandran, former Country Head and CEO of Morgan Stanley India, and currently Chairman of TeamLease Services Ltd. The committee comprises eminent experts from capital markets, asset management, and securities law:
Shri Ananth Narayan, former Whole-Time Member, SEBI
Ms Devina Mehra, Founder & CMD, First Global
Shri Kalpen Parekh, MD & CEO, DSP Mutual Fund
Shri Prashant Jain, CIO, 3P Investment Managers and former CIO, HDFC Mutual Fund
Shri Rajeev Thakkar, CIO, PPFAS Asset Management
Shri Raamdeo Agrawal, Co-founder, Motilal Oswal Financial Services
Shri Sankaran Naren, CIO, ICICI Prudential AMC
Shri Sumit Agrawal, Founder, Regstreet Law Advisors
Shri Ashok Kumar Soni, Executive Director, PFRDA
The diverse composition of the committee brings together deep expertise in equity and debt markets, fund management, regulatory frameworks, and long-term investment strategy.
Timeline and Expected Outcomes
SAARG has been given a nine-month timeframe to examine the current NPS investment framework and submit its recommendations to PFRDA. The committee’s report is expected to lay the foundation for next-generation pension investing in India, with a focus on resilience, transparency, sustainability, and improved retirement outcomes for subscribers.
What This Means for NPS Subscribers
For NPS subscribers, the SAARG initiative signals a potential shift towards:
Better diversification across asset classes
More sophisticated risk management
Greater choice in investment design
Improved long-term return potential aligned with retirement goals
By aligning NPS investments with global pension best practices and India’s evolving financial markets, PFRDA aims to ensure that the system remains robust, adaptive, and capable of supporting subscribers throughout their retirement journey.
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