PFRDA Introduces Multiple Scheme Framework for Non-Government NPS Subscribers from October 1

The Pension Fund Regulatory and Development Authority (PFRDA) has announced a significant change in the National Pension System (NPS) by introducing a Multiple Scheme Framework (MSF) for non-government subscribers. Effective from October 1, 2025, this initiative is designed to provide enhanced flexibility and choice to individuals in managing their retirement savings.

What Is the Multiple Scheme Framework?

The Multiple Scheme Framework allows non-government sector subscribers, including corporate employees, self-employed individuals, professionals, and digital economy workers, to hold and manage more than one scheme under the NPS. 

This is a departure from the existing structure, where only a single investment choice per tier was available. The system will be linked through the subscriber’s Permanent Account Number (PAN), enabling consolidated reporting across Central Recordkeeping Agencies (CRAs).

Flexibility and Personalisation

Subscribers will now have the option to manage schemes that cater to their unique financial needs. Pension Funds have been authorised to design customised schemes for specific groups such as corporate employees with co-contributions, professionals, or digital workers. 

Each scheme must offer at least two variants: moderate and high risk, while Pension Funds may also include a low-risk option. Equity allocation in high-risk variants can go up to 100%, giving scope for varied risk appetites.

Switching and Exit Rules

Exit provisions will continue under the existing PFRDA regulations for NPS withdrawals. Switching from MSF schemes to common schemes will be allowed during the vesting period. However, switching between Section 20(2) schemes will be permitted only after a minimum of fifteen years or at the time of normal exit. These rules ensure continuity and clarity in managing retirement investments.

Cost Structure and Incentives

The cost structure under the MSF remains aligned with the low-cost principles of the NPS. Total charges are capped at 0.30% of Assets Under Management per year. Pension Funds that attract more than 80% new subscribers to a scheme will receive an additional incentive of 0.10%, valid for three years or until the scheme crosses 50 lakh subscribers, whichever comes first.

Transparency and Governance

All new schemes will require PFRDA’s prior approval and must follow investment norms. They will be benchmarked against relevant market indices. Pension Funds must also publish a standardised “NPS Scheme Essentials” document, which will include scheme objectives, asset allocation, risks, vesting provisions, exit rules, charges, and details of fund managers.

Expected Impact

According to PFRDA, the introduction of the Multiple Scheme Framework is expected to greatly expand choice and personalisation for subscribers. It enables individuals to balance conservative and aggressive strategies within a single PRAN and align their investments with different stages of life. For Pension Funds, the framework creates room for innovation and growth, while strengthening the credibility of NPS as a globally benchmarked pension system.

Read More: UPS to NPS Switch Permitted: Central Govt Provides One-Time Option Before September 30, 2025! 

Conclusion 

The Multiple Scheme Framework marks a major step towards enhancing flexibility and personalisation within the NPS. By broadening choices and maintaining low costs, PFRDA aims to strengthen the system’s inclusivity and global credibility.

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