PFRDA Plans Major NPS Revamp with Gold, Silver, and AIF Options

The Pension Fund Regulatory and Development Authority (PFRDA) is preparing a major upgrade to the National Pension System (NPS). The regulator plans to include new investment options such as gold, silver, and unlisted companies through Alternative Investment Funds (AIFs). These changes aim to give pension funds more flexibility and align NPS with the evolving needs of private sector employees, professionals, and gig workers.

Gold, Silver, and AIFs as New Choices

PFRDA Chairperson Sivasubramanian Ramann explained that demand for gold and silver comes mainly from safety rather than returns. AIFs may also be treated as a separate asset class instead of being clubbed under equity or debt, which will help fund managers manage risk better and simplify portfolios. The revised guidelines are expected in 30–45 days.

New Multiple Scheme Framework

From October 1, PFRDA will introduce a multiple scheme framework (MSF). This will allow NPS subscribers to invest in more than one scheme managed by pension fund managers. Each manager can now offer 2 schemes in every category, one high-risk and another moderate-risk.

A key change is the proposal to allow up to 100% equity allocation under MSF, compared to the current 75% limit. New funds will have a 15-year lock-in, and switches will only be allowed to existing NPS schemes if performance is weak.

Flexibility in Annuitisation and Exit

Two important proposals are also under consideration:

• Reducing compulsory annuitisation from 40% to 20% of the corpus.
• Allowing subscribers to exit NPS after 15 years, even before turning 60.

These changes could be especially useful for younger workers and those in non-traditional jobs.

Read more: EPFO 3.0 Rollout: Backed By TCS, Infosys And Wipro, What Will Change For Over 8 Crore PF Members.

Tax Uncertainty

While the reforms open new opportunities, taxation remains unclear. At present, early exits require 80% annuitisation unless the corpus is under ₹2.5 lakh. It is not yet known whether the new proposals on reduced annuitisation and early exit will change existing tax exemptions.

Conclusion

PFRDA’s move to bring in gold, silver, AIFs, and multiple scheme options marks a big step forward for NPS. The reforms are designed to make the system more flexible, attractive, and aligned with modern retirement needs. However, clarity on taxation and switching rules will be key to ensuring these benefits translate into real value for subscribers.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or 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.

Investments in securities are subject to market risks. Read all related documents carefully before investing.