Mumbai: The government will give subscribers under the new pension system (NPS) a choice to invest in fixed income instruments and equity, finance minister P Chidambaram said in a written reply in the Rajya Sabha.

Under the NPS, subscribers will have a choice of schemes with different portfolios and different risk profiles. The regulator would frame the investment guidelines, Chidambaram added.

With an option to invest the subscriber's funds in government securities alone, he said there would be no element of compulsion to invest in equity.

Chidambaram stated, "Every insurer would have to develop its own scientific basis of rating the risks, which would have to be filed with the IRDA and would ensure that the basis is technically sound. It is envisaged that, under the new pension system, subscribers will have a choice of multiple investment options with varying proportions of investment in fixed income instruments and equity," the minister said.

"However, until the full NPS architecture is in place, in the interim, contributions under NPS are credited into the public account," he said.