As part of Azadi Ka Amrit Mahotsav and in line with its ongoing reforms to strengthen India’s pension ecosystem, the Pension Fund Regulatory and Development Authority (PFRDA) has released a Consultation Paper 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).”
This initiative marks a significant step toward improving governance, enhancing transparency, and protecting subscriber interests in pension schemes such as the National Pension System (NPS) and the Atal Pension Yojana (APY).
Introducing a Dual Valuation Framework
Dated October 17, 2025, the consultation paper proposes a dual valuation framework—comprising accrual and fair market approaches—for long-term Government Securities held under NPS and APY portfolios. The framework seeks to more accurately reflect the long-term, low-turnover investment philosophy of pension funds while maintaining transparency for subscribers.
This approach is designed to meet three core objectives:
- Ensuring stability and simplicity for subscribers: By presenting a more stable view of pension wealth accumulation, the framework helps subscribers better understand the long-term growth of their savings without being affected by short-term market fluctuations.
- Reducing volatility in NAVs: Since pension fund subscribers are typically long-term investors, temporary changes in interest rates do not significantly impact their retirement corpus. The new method aims to minimize short-term volatility in NAV calculations, ensuring smoother returns.
- Supporting long-term capital formation: By aligning pension fund investments with infrastructure and other long-gestation assets, the framework contributes to nation-building and promotes India’s vision of sustainable, productive capital deployment.
Together, these reforms will allow PFRDA-regulated pension funds to balance transparency with stability, helping subscribers track their wealth more meaningfully during the accumulation phase while promoting responsible investment practices.
Encouraging Stakeholder Participation
The PFRDA has emphasized that this consultation process is collaborative and participatory. To that end, the Consultation Paper is available on the official PFRDA website under the Research and Publication section: https://pfrda.org.in/en/web/pfrda/consultation-papers.
All stakeholders—including NPS and APY subscribers, pension fund managers, financial institutions, industry experts, and academicians—are invited to review the proposals and share their inputs. The Authority has called for feedback and comments to be submitted by November 30, 2025.
This open feedback mechanism is an integral part of PFRDA’s ongoing efforts to ensure that policy decisions are grounded in practical experience, subscriber needs, and expert insights. By inviting participation from a wide range of stakeholders, PFRDA aims to refine the proposed framework and ensure its smooth and effective implementation across the pension ecosystem.
Towards Greater Transparency and Confidence
The proposed dual valuation model reflects PFRDA’s commitment to transparency, stability, and long-term sustainability in India’s pension systems. As India continues to expand financial inclusion and retirement security through NPS and APY, such reforms reinforce the trust and confidence of millions of pension subscribers.
Through these initiatives, PFRDA continues to align the pension sector with the broader goals of Azadi Ka Amrit Mahotsav—building a resilient, inclusive, and self-reliant financial future for all citizens.