In News: The Pension Fund Regulatory and Development Authority (PFRDA) has constituted a high-level expert committee called Strategic Asset Allocation and Risk Governance (SAARG) to review and modernise the National Pension System (NPS) investment guidelines.
Purpose of SAARG Committee
- To strengthen NPS investment architecture
- Align Indian pension investments with:
- Global best practices
- Evolving Indian capital markets
- Long-term subscriber objectives
Key Functions / Mandate
1Foundational Review & Global Benchmarking
Assess current NPS investment guidelines
Benchmark against leading global pension systems
2Asset Class Review & Expansion
Examine existing asset classes
Recommend new asset classes to enhance diversification and resilience
3Strategic Asset Allocation
Propose optimal allocation across:
§Equity
§Debt
§Money market instruments
§Alternative investments
Set prudential limits for each category
4Performance & Accountability
Reform benchmarking and evaluation methods for Pension Funds under NPS
Strengthen transparency and accountability
5Risk Management & ALM
Recommend frameworks for:
§Market risk
§Credit risk
§Liquidity risk
§Operational risk
Ensure alignment with pension liabilities (ALM – Asset Liability Management)
6Governance & Intermediaries
Review custodial architecture
Improve end-to-end investment processes across NPS intermediaries
7Sustainability Integration: Embed climate transition risks and net-zero pathways in investment decision-making.
Significance
- Expected to modernise NPS investments in line with global pension trends.
- Improves risk-adjusted returns for subscribers.
- Incorporates ESG (Environmental, Social, Governance) and climate risk considerations.
- Enhances resilience of Indian pension funds against market volatility.
IAS-2026 - OPTIONAL / GEOGRAPHY / PUBLIC ADMINISTRATION / SOCIOLOGY / ANTHROPOLOGY / ORIENTATION ON 03 & 04-10-2025 
