New Delhi, April 1 -- India's pension regulator is planning to raise the equity component from 15% to 25% in the default scheme for central government employees under the National Pension System (NPS), said two people close to the discussions.

Under the NPS, there are four market-linked schemes. In the default scheme, only government pension fund managers-SBI Pension Funds Pvt. Ltd, UTI Retirement Solutions Ltd, and LIC Pension Fund Ltd-can manage employees' contributions. Each fund manager must invest 85% of the contribution in fixed-income assets and 15% in equities.

"An increase in equity allocation from 15% to 25% will bring long-term benefits to members of these funds. The long-term upsides of equity markets are well-established, e...