PFRDA Seeks Public Feedback on New Valuation Framework for Pension Funds, Proposes Dual System for Transparency and Stability
Pension Fund Regulatory and Development Authority (PFRDA) has released a new Consultation Paper to align valuation guidelines with the objectives of long-term pension funds investing in government securities.
The 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)”, aims to strengthen governance, protect subscribers’ interests, and promote financial stability in India’s pension system.
Issued on October 17, 2025, the paper proposes introducing a dual valuation framework — combining ‘accrual’ and ‘fair market’ methods — for long-term government securities held under the National Pension System (NPS) and Atal Pension Yojana (APY).
According to PFRDA, this approach serves three major goals:
- It ensures stable and easy-to-understand pension wealth accumulation during the savings phase.
- It reduces the effect of short-term interest rate changes on NAV, since such fluctuations have little impact on long-term subscribers.
- It supports long-term capital formation by channeling investments into productive infrastructure projects.
The proposed system is designed to make pension wealth reporting clearer for subscribers and to enhance long-term financial stability within the pension sector.
PFRDA has invited feedback from all stakeholders — including NPS subscribers, pension funds, industry experts, and the general public — to refine and finalize the framework.
The full consultation paper is available on the PFRDA website under the “Research and Publication” section: https://pfrda.org.in/en/web/pfrda/consultation-papers.
Stakeholders can submit their comments and suggestions on the proposal until November 30, 2025.
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