The Pension Fund Regulatory and Development Authority (PFRDA) has established a committee of investment experts called Strategic Asset Allocation and Risk Governance (SAARG) to evaluate and modernize the investment framework of the National Pension Scheme (NPS). This committee, led by Narayan Ramachandran, former Country Head and CEO of Morgan Stanley India, aims to enhance diversification, improve risk management practices, and expand subscriber choice within the NPS.
SAARG, comprising experts from capital markets, asset management, and securities law fields, has a nine-month timeline to assess and present its recommendations to PFRDA. The review scope includes strategic asset allocation frameworks, asset classes, performance measurement, governance practices, and sustainability integration in investment decisions, among other aspects.
The formation of SAARG underscores PFRDA’s commitment to fortifying the NPS investment framework in a proactive manner, ensuring resilience, diversification, and alignment with subscribers’ evolving long-term wealth creation needs. The committee will evaluate existing NPS investment guidelines, benchmark them with global pension systems, and propose reforms to enhance diversification, mitigate risks, and optimize asset allocation for long-term retirement wealth creation.
SAARG will also focus on refining subscriber investment choices, suggesting a mix of active and passive investment strategies, and defining exposure limits across asset classes. The goal is to strengthen the investment architecture of NPS, supporting sustainable retirement wealth creation and improving investment decision-making processes for subscribers.
PFRDA, NPS, SAARG, Narayan Ramachandran, Morgan Stanley India, Capital Markets, Asset Management, Securities Law
