The Pension Fund Regulatory and Development Authority has cleared multiple policy changes aimed at strengthening the National Pension System (NPS), with a focus on expanding participation, improving governance standards and aligning the framework with the evolving retirement needs of subscribers.
The reforms come as India’s pension landscape continues to mature, with policymakers seeking to deepen long-term savings and ensure sustainability of retirement income for a growing formal workforce.
One of the major changes approved in principle allows scheduled commercial banks to independently sponsor pension funds under the NPS. Until now, banks were restricted in their ability to directly enter pension fund management.
Under the revised approach, eligible banks meeting prescribed financial and prudential norms will be permitted to sponsor pension funds, subject to detailed guidelines that will be issued separately.
The authority has also taken steps to strengthen governance at the NPS Trust by reconstituting its board. Former State Bank of India chairman Dinesh Kumar Khara has been appointed as chairperson of the NPS Trust Board, along with the induction of two new trustees. The move is aimed at enhancing oversight, accountability and decision-making at the trust level.
PFRDA has approved changes to the Investment Management Fee structure, which will come into effect from April 1, 2026. The revised framework introduces slab-based fees with differentiated rates for government and non-government sector subscribers, while retaining existing charges for select government schemes and auto-choice investment options.
In addition, part of the annual regulatory fee collected from pension funds will be allocated to support awareness and outreach initiatives.
These efforts are intended to improve subscriber education, expand coverage and strengthen engagement across corporate, retail and emerging workforce segments. Under Non-Government Sector, the following shall be the structure for IMF:
| Slabs of AUM (in ₹ Crores) | IMF Rates for NGS Subscribers |
| Upto 25,000 | 0.12% |
| Above 25,0000 & Upto 50,000 | 0.08% |
| Above 50,000 & Upto 1,50,000 | 0.06% |
| Above 1,50,000 | 0.04% |
The Annual Regulatory Fee (ARF) for Pension Funds remains at 0.015% of AUM. From this total, 0.0025% will be allocated to the Association of NPS Intermediaries (ANI). These funds are earmarked for awareness, outreach, and financial literacy programs conducted under PFRDA’s supervision.
Read More: Highest NPS Partial Withdrawal Requests Were for Residential Housing in FY25
The regulator believes these reforms will help create a more competitive, transparent and resilient NPS ecosystem. By widening institutional participation, reinforcing governance and recalibrating fee structures, PFRDA aims to support deeper pension penetration and improve long-term retirement outcomes, in line with India’s broader push towards financial security and inclusive growth.
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Published on: Jan 1, 2026, 3:23 PM IST
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