NPS Investment Rules Updated: Gold, Silver ETFs and Nifty 250 Now Allowed in Pension Portfolios

India’s retirement savings landscape is set for a significant upgrade after the Pension Fund Regulatory and Development Authority (PFRDA) introduced new unified investment rules for major pension schemes, including the National Pension System (NPS), Unified Pension Scheme (UPS) and Atal Pension Yojana (APY).

Issued on December 10, 2025, the updated master circular replaces multiple older guidelines and expands investment choices while strengthening risk controls. The move is expected to make pension portfolios more diversified, resilient and aligned with global investment practices.

Gold & Silver ETFs Now Allowed

For the first time, NPS and other pension schemes can invest in gold and silver exchange-traded funds (ETFs). Precious metals—traditionally considered safe-haven assets—are expected to add stability and inflation protection to long-term retirement savings.

Broader Equity Exposure with Nifty 250

The circular also permits equity investments in the Nifty 250 index, moving beyond large-cap stocks and giving pension funds exposure to a more diversified equity base. This shift is designed to improve long-term growth potential while still maintaining strict regulatory safeguards.

Entry into Alternative Investment Funds (AIFs)

Pension funds can now make limited allocations to Category I and II AIFs, which typically invest in start-ups, infrastructure and long-horizon sectors. The inclusion of AIFs marks a gradual but notable expansion into higher-growth, innovation-driven areas of the Indian economy.

Clear Allocation Limits Across Asset Classes

PFRDA has also reinforced category-wise caps to maintain portfolio stability:

Government Securities – Up to 65%

• Central and state government bonds

• PSU bonds

• Gilt mutual funds

This ensures pension savings remain anchored in low-risk, stable instruments.

Corporate Debt – Up to 45%

Includes:

• High-rated corporate bonds

• Basel III compliant instruments

• Masala bonds

• Bank deposits

Strict rating and issuer norms aim to minimise credit risk.

Equity – Up to 25%

• Investments allowed in Nifty 250 stocks

• Select BSE-listed companies

• Majority exposure must remain within top 200 market-cap firms

REITs and InvITs

Exposure permitted within predefined limits to maintain diversification.

Stronger Risk Controls

To safeguard subscribers:

• No single sector can exceed 15% of total investments

• Single-company exposure remains tightly capped

• AIF exposure is limited and subject to strict screening

These measures ensure pension funds remain diversified and shielded from concentration risks.

What This Means for Subscribers

The revised guidelines make NPS and related schemes more future-ready by:

• Offering broader asset diversification

• Enhancing growth potential through equities, AIFs and precious metals

• Preserving safety through strict caps and risk checks

Overall, subscribers stand to benefit from improved long-term returns with balanced risk, marking one of the most significant evolutions in India’s pension system.