PFRDA Revises NPS Distributor Charges: ₹200 Onboarding Fee & 0.20% Annual AUM Payout

The Pension Fund Regulatory and Development Authority (PFRDA) has announced new charges for Points of Presence (PoPs) distributing the National Pension System (NPS), including schemes like NPS Vatsalya and NPS Lite. 

New Onboarding and Annual Charges for PoPs 

PoPs will now receive a one-time onboarding charge of ₹200 for every new NPS subscriber account they onboard. This amount will be paid in installments of ₹50 every quarter through the cancellation of units by central recordkeeping agencies.  

Additionally, PoPs will earn annual charges of 0.20% of the assets under management (AUM), adjusted through the net asset value and paid quarterly for active accounts. Dormant accounts will not incur charges. 

Revised Framework for PoPs 

Under the previous framework, PoPs could choose between charging 0.20% of AUM or collecting a flat ₹200 in the first year without AUM-based charges.  

The revised structure aims to streamline the compensation process for PoPs, who are pension agents appointed by pension fund managers to distribute NPS and service subscribers.  

Mutual Fund Distributors (MFDs) can also distribute NPS by partnering with a pension fund. 

Digital Onboarding Incentives 

PFRDA has introduced a lower onboarding charge of ₹100 for subscribers who complete the process through a fully digital and non-face-to-face mode with the PoP. Applicable taxes, such as GST, will be charged separately. 

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Minimum Contribution Requirements 

Currently, subscribers must contribute at least ₹250 at the time of onboarding and at least ₹10 for subsequent contributions. These requirements ensure that subscribers maintain active accounts and continue to benefit from the NPS. 

Conclusion 

The PFRDA's revised charges for NPS distributors aim to enhance the efficiency of the onboarding process and provide fair compensation for PoPs. By introducing digital incentives and maintaining minimum contribution requirements, the authority seeks to encourage wider participation in the NPS. 

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