The Pension Fund Regulatory and Development Authority (PFRDA) has released a draft consultation paper aimed at enhancing transparency and clarity in pension wealth accumulation for subscribers, while ensuring long-term financial stability and alignment with India’s broader economic objectives.
Titled “Alignment of Valuation Guidelines with the Core Objectives of Long-Only Funds When Investing in Government Securities and Calculation of Net Asset Value (NAV),” the paper outlines a new approach to managing long-dated government securities within the National Pension System (NPS) and Atal Pension Yojana (APY) frameworks. The draft seeks to make pension fund valuations more robust, reducing the impact of short-term market fluctuations on subscribers’ accounts.
The consultation paper proposes a dual valuation framework, combining accrual-based and fair market valuation methods for government securities held in long-term pension portfolios. This approach aims to depict a more stable and simplified picture of pension wealth accumulation during the accumulation phase, mitigating the effects of short-term interest rate volatility, which typically does not affect subscribers’ retirement outcomes materially.
According to PFRDA, the proposed framework aligns pension fund investments with long-term capital formation, supporting productive infrastructure projects and fostering confidence among stakeholders. By balancing market responsiveness with stability, the regulator hopes to enhance transparency, subscriber trust, and governance standards in pension fund management.
The draft also emphasizes PFRDA’s broader commitment to improving governance, safeguarding subscriber interests, and contributing to India’s financial and infrastructural growth. The consultation process is open to all stakeholders, including existing and prospective NPS participants, pension fund managers, industry experts, academia, and the general public.
Stakeholders are invited to provide comments, inputs, and feedback on the proposed framework by November 30, 2025. The authority’s initiative is expected to serve as a significant step toward modernizing pension fund management in India, ensuring that subscribers have a clear, reliable, and forward-looking understanding of their retirement wealth.
By focusing on both long-term stability and transparency, PFRDA aims to make India’s pension system more resilient, predictable, and aligned with the country’s economic growth priorities, while enhancing subscribers’ confidence in the value of their accumulated retirement savings.
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