Corporate NPS: Can salaried employees invest in the 100% equity option under MSF? PFRDA clarifies

The Pension Fund Regulatory and Development Authority (PFRDA) has recently introduced several changes to make the National Pension System (NPS) a more attractive retirement savings tool for investors.

However, ever since the announcement of the MSF, there has been confusion among salaried employees subscribed to corporate NPS about whether they can invest in the 100% equity allocation option.

The answer is yes. Salaried employees under corporate NPS can access the 100% equity allocation option, along with other schemes available under the MSF. However, there is a condition. Let's understand it in this article.

What is the condition for opting for the 100% equity scheme under corporate NPS?

Investments in schemes offered under the MSF, including the 100% equity option, can only be made voluntarily and not as part of the corporate NPS structure.

"Apart from the arrangement of investment made under the co-contribution scheme, if the employees of the Corporate are desirous of making contribution to Common Schemes or those offered under Multiple Scheme Framework (MSF), within the NPS, they can do it as a voluntary investment," PFRDA said in a circular dated November 7, 2025.

This clarification from PFRDA means that your existing contributions under the corporate NPS structure cannot be diverted to the MSF.

Under corporate NPS, both the employer and the employee are required to mutually agree on a contribution arrangement, which can vary from one company to another. In some cases, both employers and employees may co-contribute, while in others, only the employer may contribute.

Pension fund selection rule revised

Meanwhile, the pension regulator has also revised the provisions for exercising choices of pension funds and investments. Here's what the new rules say:

"In a joint contribution structure, where both employers and employee are co-contributing or where employer is contributing higher amounts or where only the employer is contributing, the following decisions involving choice of pension fund or choice of schemes that are available for employees to invest the total funds, shall be decided in a formal and mutual agreement between the management and the employees in whatever manner that is accepted between the two parties," PFRDA said.

"Decision of Pension Fund made initially shall be reviewed by the employer on an annual basis and based on the pre-determined conditions of the mutual agreement the decision of change of Pension Fund shall be taken," PFRDA said.

However, the pension regulator has urged employers and employees to consider the long-term nature of pension savings before making any changes to their choice of pension fund.

"While considering the performance of the Pension Fund and the conditions that are agreed upon for making a change in the Pension Fund, the mutual agreement shall consider the long-term nature of the Pension saving and the historic performance of the asset classes over periods of 20 to 30 years," PFRDA said.

"Decisions that have an impact on wealth generating products of long-term nature, when related to returns on investment, are not usually driven by impulses that are connected to short term savings and investments," it added.

The mutual agreement between employee and employer shall permit sufficient choice of schemes within a pension fund such that the risk appetite of different employees is suitably accommodated. in this context, PFRDA has said that employers may allow employees to make investment decisions on their own.

"Employers may at any time decide that the decision of investment in a Scheme or with a Pension Fund, may be taken fully by the employee without reference to any mutual agreement," PFRDA said.