PFRDA proposes dual valuation framework for pension funds; seeks stakeholder feedback by November 30
PFRDA stated that the initiative reflects its commitment to improving governance, protecting subscriber interests, and strengthening India’s pension sector as a pillar of sustainable financial development.
New Delhi, October 22: 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)”. The paper aims to align valuation methodologies with the long-term nature of pension fund investments in government securities under the National Pension System (NPS) and Atal Pension Yojana (APY).
The proposed framework introduces a dual valuation approach — combining ‘accrual’ and ‘fair market’ methods — to enhance transparency, stability, and consistency in the calculation of fund NAVs. It seeks to achieve three primary objectives:
- Depict stable and simplified pension wealth accumulation for subscribers during the accumulation phase.
- Reduce the impact of short-term interest rate fluctuations on NAVs, since such variations have limited long-term relevance.
- Align pension investments with long-term capital formation, supporting financing for infrastructure and productive assets.
PFRDA stated that the initiative reflects its commitment to improving governance, protecting subscriber interests, and strengthening India’s pension sector as a pillar of sustainable financial development.
The consultation paper, dated October 17, 2025, is available on the PFRDA website under the Research and Publications section (pfrda.org.in). Stakeholders — including NPS participants, pension funds, financial experts, and the general public — are invited to submit comments and suggestions by November 30, 2025.
