Retirement savings overhaul: NPS now includes gold, silver ETFs

Copyright © HT Digital Streams Limited All rights reserved. With all asset classes available under one roof, the NPS can attract more investors. Summary PFRDA has allowed investments under the NPS in gold and silver ETFs and Nifty 250 stocks. The Pension Fund Regulatory and Development Authority (PFRDA) on Thursday allowed the National Pension System (NPS) to include gold and silver exchange-traded funds (ETFs) among its investment options. NPS subscribers can now invest in gold and silver ETFs offered by mutual funds, with exposure limited to 5% of the scheme’s assets under management (AUM). “Investors in the NPS have a better average investment tenure (holding period) compared to other investment methods, and they will now have a better investment mix,” said Sumit Shukla, managing director and CEO of Axis Pension Fund. “Both old and new subscribers will benefit from the move.” As of December 11, 2025, 24 carat gold has returned 62% year-to-date, from ₹7,800 per gram, while silver is trading 98% higher than its January 1 price of ₹79,376 per kilogram in the 2025 calendar year. Why only ETFs “Limiting it to Sebi-regulated gold and silver ETFs and not other unregulated ways of investing in commodities ensures that there is legal recourse available in case of any complaints,” said certified financial planner Kiran Telang. In addition, investments in physical commodities require back-end preparation, including the stock of the gold in custodian vaults, insurance against risk and hedging, which must be built over a period of time by pension fund managers. “As pension fund managers, we will have to build our expertise to invest directly in commodities. Until then, ETF investments were allowed,” Shukla said. More asset classes The pension fund regulator has further expanded the NPS investment universe by including Nifty 250 stocks. However, 90% of the scheme’s AUM should be invested only in the top 200 stocks of the Nifty 250 index. Additionally, NPS fund managers can now choose from debt securities with lower ratings. “Expanding the investment universe to include AA-rated debt securities, from an AAA rating earlier, is a significant change,” Shukla added. With all asset classes available under one roof, the NPS can attract more investors. “This is a big move by the PFRDA, and it will help the NPS become a one-stop asset allocation platform as gold and silver are now allowed, after seeing corporate bonds become eligible,” said Manav Modi, commodity analyst precious metals research, Motilal Oswal Financial Services. “These are pension funds, and the weighting has to be decided. One has to determine how much risk is attached to different asset classes,” Modi added. As the investment universe expands with both a larger number of stocks and commodities, one should continue to use other investment alternatives as the withdrawal procedure and protocol may be a concern. “It expands the NPS pool of asset classes to enable a more diversified portfolio. Due to its structure as largely a retirement savings and withdrawal oriented instrument with some flexibility, investors will still need to use other investment vehicles to support other financial goals for their families that will emerge beyond retirement,” says Vishal Dhawan, founder and CEO of Plan Avisth We. Annuity Issues However, the overall disadvantage of annuity investments persists. “Under the NPS, taxes on redemption remain unchanged, and 40% of the funds must still be used to purchase an annuity. For those who struggle with investment discipline and need to plan for retirement, this tool can be useful, especially now that it offers improved diversification. While the cost structure has improved, the annuity issue remains,” said Telang. The PFRDA is reportedly considering reducing the mandatory annuitization requirement to 20% from the current 40%. Among other sweeping changes, the NPS may have a lock-in of 15 years instead of the current lock-in of retirement age. Get all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download the Mint News app to get daily market updates. more topics #investment #Pensionfund #Pensionplan Read next story