Source: PIB
Subject: Economy
Context: The PFRDA has constituted the Committee for Strategic Asset Allocation and Risk Governance (SAARG) to comprehensively review and modernise National Pension System (NPS) investment guidelines.
- The SAARG committee, chaired by Narayan Ramachandran, will submit its recommendations within 9 months.
About Narayan Ramachandran Committee:
What it is?
- A high-level expert committee titled Strategic Asset Allocation and Risk Governance (SAARG) to review and reform NPS investment guidelines across Government and Non-Government sectors.
Constituted by: PFRDA, the statutory regulator for pension funds in India.
Aim:
- To strengthen NPS investment architecture by aligning it with global pension best practices, the evolving Indian capital market, and long-term subscriber needs.
Key functions / mandate:
- Foundational review & global benchmarking: Assess adequacy of current NPS guidelines and benchmark them with leading global pension systems.
- Asset class review & expansion: Review existing asset classes and recommend new asset classes to improve diversification and resilience.
- Strategic asset allocation: Propose optimal allocation across equity, debt, money market and alternatives with prudential limits.
- Performance & accountability: Reform benchmarking and evaluation methods for Pension Funds under NPS.
- Risk management & ALM: Recommend comprehensive market, credit, liquidity and operational risk frameworks aligned with pension liabilities.
- Governance & intermediaries: Review custodial architecture and end-to-end investment process across NPS intermediaries.
- Sustainability integration: Embed climate transition risks and net-zero pathways into NPS investment decisions.
