PFRDA Updates NPS Fund Management Charges for 5-Year Period Starting April 2026

The Pension Fund Regulatory and Development Authority (PFRDA) has revised the Investment Management Fee (IMF) charged by pension funds under the National Pension System (NPS). The updated structure will take effect from April 1, 2026 and will remain in place for 5 years. 

The existing IMF framework is valid until March 31, 2026. Under the current structure, the same fee rates apply to both Government Sector (GS) and Non-Government Sector (NGS) subscribers. 

Committee Reviewed the Fee Framework 

To review the charges, the regulator had set up an Expert Committee chaired by U. K. Sinha, former chairperson of the Securities and Exchange Board of India (SEBI). 

Based on the committee’s recommendations, the PFRDA Board approved a revised structure for investment management fees charged by pension funds managing NPS assets. 

Slab-Based Charges Linked to AUM 

The revised framework continues to follow a slab-based structure linked to assets under management (AUM). However, separate rates will apply to government and non-government sector subscribers. 

For non-government sector subscribers, the IMF will be 0.12% for AUM up to ₹10,000 crore, remaining the same up to ₹25,000 crore. The fee reduces to 0.08% for AUM between ₹25,000 crore and ₹50,000 crore, 0.06% between ₹50,000 crore and ₹1.5 lakh crore, and 0.04% for AUM above ₹1.5 lakh crore. 

For government sector subscribers, the IMF ranges from 0.09% for AUM up to ₹10,000 crore and gradually declines to 0.03% for AUM exceeding ₹1.5 lakh crore. 

No Change for Certain Government Subscribers 

The regulator stated that there will be no change in the IMF applicable to government sector subscribers under composite schemes. 

Subscribers in the government sector who have opted for Auto Choice or Active Choice with full allocation to government securities will continue to pay the same IMF as those under composite schemes. 

Regulatory Fee for Pension Funds Unchanged 

The annual fee payable by pension funds to PFRDA remains unchanged. Pension funds will continue to pay 0.015% of AUM per year or ₹10 lakh annually, whichever is higher, along with applicable taxes. 

The fee will be paid quarterly at 0.00375% of AUM or ₹2.5 lakh per quarter, whichever is higher, based on AUM at the end of the previous quarter. 

Corporate Entities to be Reclassified 

PFRDA has also decided to reclassify existing corporates under the NPS framework. These will be categorised as Government Entities or Legal Entities other than Government. 

Government entities will include statutory bodies, government companies, and organisations owned or controlled by the Central or State government, including CPSEs and SPSEs. 

Read More: Income Tax Department Warns of Fake Email Claiming Tax Demand for AY 2025–26! 

Conclusion 

The revised IMF framework introduces separate fee slabs for government and non-government subscribers while retaining the slab-based approach linked to assets under management. The changes will apply from April 2026 for a 5-year period. 

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