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Government Approves Extension of Life Cycle 75 (LC75) and Balanced Life Cycle (BLC) Options to Central Government Employees Under NPS and UPS Scheme: A New Opportunity for Odisha Employees

The Government of India has recently approved the extension of two new investment options — Life Cycle 75 (LC75) and Balanced Life Cycle (BLC) — to Central Government Employees under both the National Pension System (NPS) and the Unified Pension Scheme (UPS). This move is a significant step forward in offering more flexibility and choice in retirement planning for government employees, including those in Odisha who are eager to explore better pension benefits.

What Does This Mean for Odisha Employees?

Traditionally, Odisha state government employees have been contributors to the NPS, benefiting from a default investment option that offers limited choices. However, with the Government's approval to extend LC75 and BLC options to both NPS and the newly introduced UPS, Odisha employees now have the chance to select from a broader spectrum of investment plans tailored to their risk appetite and retirement goals.

What Are LC75 and BLC Options?

LC75 (Life Cycle 75): This option allows a maximum equity allocation of 75%, gradually tapering from age 35 to 55. It is ideal for employees with a higher risk appetite who want their retirement corpus to grow aggressively in the early years and progressively become safer as they near retirement.

BLC (Balanced Life Cycle): This is a modified version of LC50, with equity allocation tapering starting from age 45, allowing employees to stay invested in equities longer if they wish. It provides a balanced approach for those who want moderate growth with controlled risk.

Both options feature an automatic glide path that reduces equity exposure as employees age, thus protecting their savings from market volatility close to retirement.

Why Should Odisha Employees Consider Shifting to UPS?

The UPS scheme is designed to be more inclusive and offers these expanded investment options, which can be highly attractive to employees looking for enhanced control over their retirement planning. Here are some reasons Odisha employees might want to consider shifting to UPS:

Greater Flexibility and Choice: Unlike the default NPS option, UPS offers multiple investment pathways, including LC75 and BLC, allowing employees to align their pension investments with their personal risk tolerance.

Better Retirement Planning: The glide path mechanism ensures that the investment portfolio becomes more conservative as retirement approaches, reducing risk while maximizing returns.

Diverse Asset Allocation: Employees can choose from a mix of government securities, corporate bonds, and equity, based on their age and risk profile, leading to a well-balanced and potentially higher-yielding retirement corpus.

Asset Allocation at a Glance

For instance, in the LC75 scheme, equity allocation starts at 75% for employees up to 35 years of age and gradually reduces to 15% by age 55, with the remainder invested in corporate bonds and government securities. The BLC option allows employees to stay invested in equities longer, tapering equity exposure from age 45, thus providing a longer horizon for growth.

Age	LC75 Allocation	BLC Allocation
Up to 35 Years	E: 75%, C: 10%, G: 15%	E: 50%, C: 30%, G: 20%
40 Years	E: 55%, C: 15%, G: 30%	E: 50%, C: 30%, G: 20%
45 Years	E: 35%, C: 20%, G: 45%	E: 50%, C: 30%, G: 20%
50 Years	E: 20%, C: 20%, G: 60%	E: 40%, C: 20%, G: 40%
55 Years	E: 15%, C: 10%, G: 75%	E: 35%, C: 10%, G: 55%

Note: E = Equity, C = Corporate Bonds, G = Government Securities

The Road Ahead

This Government approval represents a strategic enhancement to the retirement savings landscape for Odisha's government employees. As awareness spreads, many employees are eager to leverage these new options under the UPS scheme for better returns and tailored retirement planning.

Odisha employees who are currently contributing under NPS are encouraged to explore the UPS scheme and consider switching to enjoy the benefits of these expanded investment choices. The decision to shift should be made after careful evaluation of one's risk appetite, retirement goals, and features of each option.

In Conclusion:

The extension of LC75 and BLC investment options under both NPS and UPS empowers Odisha employees with greater control over their pension funds. With more flexible and diversified choices, employees can now plan more effectively for a financially secure and comfortable retirement. The UPS scheme, with its broader investment options, presents a promising avenue for those seeking enhanced growth and risk management in their retirement portfolios.

If you are an Odisha government employee, now is the time to assess your pension plan and consider the UPS scheme for a more flexible, tailored retirement investment strategy!

For the official press release, click here.