Can Corporate NPS Subscribers Invest 100% in Equity Under MSF? PFRDA Clarifies

The Pension Fund Regulatory and Development Authority (PFRDA) has clarified that salaried employees participating in the corporate National Pension System (NPS) can opt for the 100% equity investment scheme available under the Multiple Scheme Framework (MSF).

However, such investments must be made voluntarily and not through the existing corporate NPS contribution structure.

Access to 100% Equity Under Corporate NPS

According to the latest PFRDA circular dated 7 November 2025, employees covered under the corporate NPS can invest in schemes under the MSF, including the 100% equity allocation. 

However, this is permitted only on a voluntary basis. Existing employer-employee contributions under the corporate structure cannot be redirected to MSF schemes.

The regulator clarified that corporate NPS arrangements are based on mutual consent between employers and employees. 

These agreements determine whether both parties co-contribute or if only the employer contributes. Any additional investment in MSF or other NPS schemes must be made independently by the employee.

Revised Rules on Pension Fund Selection

PFRDA has also updated the framework governing how pension funds and investment choices are made under corporate NPS.

1. Mutual Decision-Making 

For contribution structures involving both employers and employees, decisions regarding pension fund selection and investment schemes must be taken jointly through a formal agreement.

2. Annual Review of Pension Fund Choice

The employer is required to review the chosen pension fund annually. Any change must align with conditions set out in the initial agreement between both parties. PFRDA has advised stakeholders to consider the long-term nature of pension investments before making any changes.

3. Focus on Long-Term Performance

The regulator emphasised that decisions affecting pension wealth should consider the performance of asset classes over 20–30 years, rather than being influenced by short-term market fluctuations.

4. Employee Independence in Investment Decisions

Employers may, if they wish, grant employees full autonomy to decide their pension fund and investment scheme without the need for mutual consent. This flexibility allows employees to align their investment strategy with their individual risk preferences.

Read More: Govt Clarifies Gratuity Rules Under NPS: Which Employees Are Eligible and Who Misses Out?

Conclusion

The PFRDA’s clarification provides greater transparency for salaried employees under the corporate NPS. While they can participate in the 100% equity option offered under the MSF, such investments must be made voluntarily and separately from their employer-linked contributions.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

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