The Pension Fund Regulatory and Development Authority (PFRDA) has released a new consultation paper focused on improving the valuation process for government bonds in the National Pension System (NPS) and Atal Pension Yojana (APY). It calls for a dual valuation framework to ensure transparency and consistency.
The Pension Fund Regulatory and Development Authority (PFRDA) has released a new consultation paper to enhance transparency and protect investor interests. It aims to refine the valuation guidelines for government securities in long-only funds.
This paper is titled “Alignment of Valuation Guidelines with the Core Objectives of Long-only Funds”, which was released on October 17, 2025. Its focus is to make investments in pension schemes like NPS and APY more stable so that subscribers can see better and clearer returns in the long run.
What is the new dual valuation framework?
The proposal calls for a dual valuation framework, which will adopt two methods:
- Accrual Method
- Fair Market Method
The valuation of long-term government bonds will be combined. The advantage of this is that small fluctuations in market interest rates will not significantly impact the Net Asset Value (NAV) of pension schemes.
What will be the benefit for subscribers?
According to PFRDA, the new framework will have three major benefits-
- Glimpse of stable returns: Investors will get a clear and stable picture of their pension wealth.
- Lower volatility: Short-term changes in interest rates will have a reduced impact on NAV.
- Long-term investment incentives: Funding for long-term infrastructure projects will become easier.
This will not only increase the confidence of investors but will also contribute to India’s capital formation and economic stability.
Suggestions sought from stakeholders
PFRDA has sought comments on this paper from all stakeholders, including existing and potential NPS subscribers, pension funds, industry experts, academics, and the general public. Individuals and organizations wishing to provide their comments can submit them by November 30, 2025. The paper is available in the Research and Publication section of the PFRDA website. You can also access it via this link: https://pfrda.org.in/en/web/pfrda/consultation-papers
A step towards economic stability
This move signals that PFRDA intends to strengthen the Indian financial system, not just pension management. Adopting a dual valuation framework will provide a more transparent and reliable approach to pension investments.
Conclusion
This new proposal from the PFRDA will make the pension investment system in India more stable and reliable. This will provide investors with accurate valuations over the long term and protect them from short-term market fluctuations. Based on the recommendations received in the coming months, major reforms in this direction are likely.
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