The Pension Fund Regulatory and Development Authority of India (PFRDA) has introduced a major change to the National Pension System (NPS), enabling equity exposure up to 100% for non-government subscribers under the Multiple Scheme Framework (MSF), effective from October 1, 2025.
The PFRDA’s MSF framework allows subscribers to invest up to 100% in equity-focused schemes, a first for the NPS. Earlier, limits restricted equity exposure to a maximum of 75%. With the MSF, subscribers can now align their pension investments with riskier assets.
The framework is optional and available for both Tier I and Tier II NPS accounts. While Tier I remains retirement-focused with a minimum vesting period of 15 years, Tier II is more flexible, with an optional vesting period.
Subscribers will be able to use their Permanent Account Number (PAN) to subscribe to multiple schemes under each Central Recordkeeping Agency (CRA), a departure from the single scheme limitation earlier.
Scheme variants include low-risk, moderate-risk, and high-risk plans. The high-risk option is the one that allows a full 100% equity allocation. Providers can tailor schemes to specific subscriber groups like digital workers, corporates, or freelancers.
Read More: NPS Rule Changes From October 1: 100% Equity Option, Flexible Withdrawals, and Multiple Schemes!
The cost of these new schemes is capped at 0.30% annually. Providers bringing in over 80% new subscribers to specific schemes can charge an extra 0.10%, taking the total to 0.40%. Transparency is a key requirement, with providers required to publish a document called "NPS Scheme Essentials", detailing asset allocation, exit norms, and switching options.
Switching is currently restricted to movement from MSF schemes to traditional common schemes during the vesting period.
The introduction of 100% equity allocation under the MSF signals a transformative shift in India's pension investment landscape. With increased flexibility, transparency, and specialised schemes, the NPS becomes a more attractive retirement planning tool for varied investor segments.
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Published on: Oct 1, 2025, 4:22 PM IST
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