LIC PFL NPS Smart Balance Tier I under the Multiple Scheme Framework (MSF) is designed to cater to subscribers seeking a balanced approach – combining the long-term growth potential of large/mid-cap equities with the stability of debt instruments. This product aims to deliver steady wealth creation while providing risk mitigation during volatile market phases.
Risk Category: HighFor new subscribers of the scheme for existing subscribers of the scheme
| Subscriber Type | Description | Actions |
|---|---|---|
| New Subscribers | For new subscribers of the scheme | |
| Existing Subscribers | For existing subscribers of the scheme |
About the Scheme:
1. IntroductionThe scheme is launched to cater to subscribers seeking high-risk, growth-oriented pension solutions with predominant exposure to equities and with exposure to fixed income investments (G Sec, Debt etc). It aims to provide a retirement savings option that aligns with long-term wealth creation goals while adhering to prudential investment norms prescribed by PFRDA.
2. Investment ObjectiveThe investment objective of the LIC PFL NPS Smart Balance Tier I is to achieve long-term capital appreciation by investing predominantly in a diversified portfolio of equity and equity-related securities along with exposure to fixed income investments. Investing in primarily equity and equity related instruments focusing on large-cap companies that show potential for superior long-term growth and exhibit stable, profitable characteristics. Similarly, investing in Fixed Income instruments focusing on Government Securities and Corporate Bonds with good credit ratings providing stability and consistent accruals to the scheme. The fund aims to consistently outperform its benchmark index, through a disciplined investment strategy that identifies companies with strong cash flows, good corporate governance, sustainable growth, and reasonable valuations.
3. Asset Allocation| Asset Class | Indicative Allocation (% of AUM) |
|---|---|
| Equity and Equity related instruments | 65% to 85% |
| Debt and Debt related instruments | 15% to 35% |
| Alternate Investment Fund | 0% to 5% |
| Short term debt instruments and related instruments | 0% to 10% |
4. Investment Strategy
Primary goal of the scheme is to generate long-term growth of capital to secure financial future through the NPS along with providing subscribers with greater scope for aligning their investments with their evolving retirement and wealth building goals. The scheme will adopt a hybrid asset allocation model combining following asset classes:
- Equity Allocation (65%–85%): Invests in established, dominant companies with strong balance sheets and wide moats. Prioritizing businesses with sustainable long-term growth potential and a good corporate governance track report. Aiming for a portfolio diversified across industries and sectors.
- Debt Allocation (15%–35%): Investments in high-quality corporate bonds, government securities and related instruments to provide stability and income.
- Alternate Investment Fund / # ETF (gold, silver etc.) :- Managing volatility through exposure AIF.
- Liquidity Management: Short term debt instruments and related instruments allocation also ensures liquidity for redemptions and smoother fund operations. This multi asset allocation approach provides both growth from equity and stability from debt, making it suitable for subscribers with a high-risk appetite.
Individuals with long term investment horizon and moderate risk appetite which includes but not limited to :-
- Corporate employees (with employer co-contribution).
- Self-employed professionals / entrepreneurs seeking high-return retirement solutions.
- Young workforce in digital economy & services sector with higher risk appetite.
- Market and equity risk due to stock exposure.
- Interest rate and credit risks in debt instruments.
- Balanced allocation cushions downside during equity volatility.
Minimum vesting period of 15 years, subject to option to exit at age 60 or at the time of retirement. (the provision would be governed by the Regulations (as amended from time to time) issued by the Regulator that is PFRDA)
- Subscribers are permitted to switch from this scheme to Common Schemes only but not to another scheme approved under Section 20(2).
- Common Schemes refer to schemes falling under the Auto Choice, Active Choice and Balance Life Cycle.
- However, the Subscribers who invest in this scheme can move their funds across the schemes under Section 20(2) upon completion of vesting period of 15 years or upon time of normal exit as defined by Exit Regulations of PFRDA. Section 20(2) schemes are schemes launched by Pension Fund Managers under the Multi Scheme Framework, duly approved by PFRDA.
- Subscribers are permitted to switch from this scheme to Common Schemes only but not to another scheme approved under Section 20(2).
- Common Schemes refer to schemes falling under the Auto Choice, Active Choice and Balance Life Cycle.
- However, the Subscribers who invest in this scheme can move their funds across the schemes under Section 20(2) upon completion of vesting period of 15 years or upon time of normal exit as defined by Exit Regulations of PFRDA. Section 20(2) schemes are schemes launched by Pension Fund Managers under the Multi Scheme Framework, duly approved by PFRDA.
Exit, withdrawal, and annuitization shall be governed by the provisions of the PFRDA (Exits and Withdrawals under NPS) Regulations, as amended from time to time.
10. Winding up of the Scheme- In case of winding up of the scheme by LIC PFL, the choice shall be provided to the Subscribers to migrate to any Common or Section 20(2) scheme.
- Those Subscribes who do not exercise their choice, would be migrated to Tier I under Auto Choice LC 50.
- Total charges: Up to 0.30% of AUM p.a.
- Other Charges: Custodian, CRA and NPS Trust charges as prescribed by PFRDA.
- Subscribers will be clearly informed of market volatility risks and potential drawdowns at the time of initial subscription.
- LIC PFL will maintain an internal risk management framework to prevent mis-selling.
The Net Asset Value (NAV) of the scheme shall be calculated and disclosed on a regular basis in accordance with PFRDA guidelines.
The NAV shall be published on the website of the Pension Fund Manager and such other platforms as may be mandated by PFRDA from time to time, to ensure transparency and accessibility for subscribers.
14. Minimum Contribution (Application/Subsequent) Initial Contribution:Minimum of Rs. 500/- and in multiples of ₹ 100/- thereafter
Subsequent Contribution:Monthly SIP: ₹ 100/- (plus in multiple of ₹ 100/-) subject to minimum ₹1,000 annually.
Lumpsum: ₹500/- (plus in multiple of ₹ 100/-) subject to minimum ₹1,000 annually.