PFRDA Constitutes SAARG Committee to Modernise NPS Investment Framework

Recently, the Pension Fund Regulatory and Development Authority (PFRDA) has constituted a high-level committee, Strategic Asset Allocation and Risk Governance (SAARG), to review, recommend and modernise the investment framework under the National Pension System (NPS).The SAARG Committee comprisesnine members, which include experts from capital markets, asset management and securities law.The Committee is chaired by Narayan Ramachandran, former country head and CEO of Morgan Stanley India.The committee has nine months from its constitution date to submit its recommendations to PFRDA.

Mandate and Scope of SAARG

¨     The committee will review existing NPS investment guidelines across government and non-government sectors.

¨     It will benchmark India’s pension investment framework with leading global pension systems.

¨     It will examine strategic asset allocation frameworks for long-term retirement objectives.

¨     It will assess the introduction of new asset classes to improve diversification.

¨     It will review performance measurement and accountability mechanisms for pension funds.

¨     It will recommend stronger risk management and asset liability management practices.

National Pension System (NPS)

¨     NPS is a government-backed, market-linked retirement savings scheme in India designed to help individuals build a corpus for their post-retirement life.

¨     It is regulated by PFRDA, and is a low-cost, portable, and transparent system available to Indian citizens aged between 18 and 70.