December 25 deadline: Last chance for NPS subscribers to switch out of Scheme A (Tier 1); important FAQs answered

The Pension Fund Regulatory and Development Authority (PFRDA) recently announced that it has decided to merge NPS Scheme A (Tier 1) with Schemes C and E to provide a rewarding investment experience to NPS subscribers. The deadline for Scheme A (Tier 1) subscribers to switch to any other asset classes under NPS is December 25, 2025. 

This means if you are a subscriber of Scheme A (Tier 1), today is the last day you can switch to any other asset class under the National Pension Scheme (NPS). 

"After a comprehensive review of the scheme’s performance and structure, and keeping your long-term retirement interests in focus, it is proposed by PFRDA to merge Scheme A with Schemes C and E. This step is intended to provide a more stable, efficient, and rewarding investment experience for subscribers," PFRDA said on December 13, 2025.

"Those NPS Subscribers who had opted for Scheme A in Tier I (Active Choice) can exercise additional choice of switching their wealth from Scheme A into any other asset classes of their choice without any additional cost till 25th Dec 2025 as per applicable guidelines," it added. 

What is NPS Scheme A?

In the National Pension System (NPS), your funds are invested in different asset classes. Each class is meant for a different type of investment. 

So, NPS Scheme A provided for investment in alternative investment funds (AIFs), including instruments like CMBS, MBS, REITs, InvIts, etc., while Scheme E and C invest in Equity and Corporate debt instruments, respectively. Now, the PFRDA has issued guidelines allowing alternative investments under Scheme E.

Additionally, there are tiers under NPS. In NPS Tier I, subscribers can choose how much they want to invest in each investment option. In auto choice, the system chooses the mix for you based on your age. 

Will this benefit subscribers?

The pension regulator said that merging Scheme A with Schemes C and E will ensure that subscribers’ contributions are invested in larger, diversified and more liquid portfolios to enable smoother management and more efficient long-term growth. The PFRDA said that this move will provide several benefits to subscribers:

• Diversification and stability
• Better returns
• Higher liquidity

What can you do now?

If you’re an NPS subscriber who has opted for Scheme A in Tier I (Active Choice), you can switch your investments into any other asset classes without any additional cost by December 25, 2025. As today is the last day to do so, ensure that you exercise your choice of switching if required. 

How to switch?

To switch asset classes, NPS subscribers can follow these steps:

• Log in to your account through the Central Recordkeeping Agency (CRA) portal
• Navigate to the transaction menu
• Select Change Scheme Preference/Change PFM – Asset Class
• Choose your Tier
• Set percentages (under Active Choice)
• Generate OTP, verify and submit 

What happens if you don’t switch?

If you don’t switch, Scheme A will be automatically merged into Schemes C and E as per PFRDA's norms.