National Pension System (NPS) gets simpler, cheaper and more flexible: 10 key changes since April

The Pension Fund Regulatory and Development Authority (PFRDA) issued a series of circulars between April and June 2026, reshaping multiple aspects of the National Pension System (NPS). These changes range from investment options and charge structures to withdrawal flexibility and onboarding technology. Drawing from the "Circulars/regulations/Guidelines" section of PFRDA's Pension Bulletin (April-June 2026), here are the 10 most significant changes.

The NPS Swasthya scheme comes with mandatory health insurance under IRDAI regulations, a minimum initial contribution of ₹25,000, and a provision allowing 100% corpus withdrawal for eligible inpatient medical emergencies. Medical claims are to be settled directly through authorised healthcare administrators.

A circular dated April 29, 2026 clarified the charge structure for Central Recordkeeping Agencies (CRAs). Tier II accounts with a corpus up to ₹1,000 will attract no Annual Maintenance Charge (AMC). Dormant accounts will be charged only 10% of the applicable AMC. No PRAN opening charge will apply for activating or opening additional Tier I or Tier II accounts under an existing PRAN. Zero-balance accounts under APY and NPS-Lite will attract nil AMC.

Effective May 5, 2026, PFRDA made SEBI regulations on insider trading, self-dealing and front-running applicable to all NPS investment activities. The circular superseded an earlier PFRDA circular dated July 25, 2019.

Pension Funds are now required to adopt SEBI-compliant internal policies, codes of conduct and compliance frameworks, with PFRDA overseeing governance through its supervisory framework.

A circular dated May 13, 2026 amended NPS Investment Guidelines to include Rupee-denominated bonds issued by the New Development Bank (NDB) as eligible instruments for both Government and Non-Government sector schemes.

Existing credit rating requirements of AA or above and maturity norms remain unchanged. The amendment followed in-principle approval from the Department of Economic Affairs, Ministry of Finance.

On May 14, 2026, PFRDA issued a clarification permitting the surrender of annuity policies in specified exceptional cases, primarily critical illness of the annuitant or eligible family members. The provision applies to annuity policies issued before October 24, 2024 that carry an explicit surrender clause. Annuity Service Providers must ensure transparent disclosure of surrender value, charges and taxes before processing requests, and surrender requires written consent of the annuitant.

On June 2, 2026, PFRDA established a Regulatory Sandbox Framework to facilitate responsible innovation in the pension sector. The sandbox provides a controlled environment for testing innovative products, services, business models and technology-driven solutions. It is open to PFRDA-regulated entities, FinTech firms and other eligible applicants, with emphasis on subscriber protection, data privacy and cybersecurity during testing.

PFRDA introduced the StAR NPS platform, developed by BSE Technologies Pvt Ltd (BTPL), on June 3, 2026. The platform enables end-to-end digital registration with CKYC and DigiLocker-based verification. Subscriber contributions are routed directly to the Trustee Bank, eliminating fund pooling by Points of Presence. The platform supports seamless integration with CRAs, the Trustee Bank and other NPS ecosystem entities.

A circular dated May 12, 2026 mandated that PAN serve as the unique identifier for Pension Agents across all Points of Presence. CRAs are required to maintain PAN-based records of Pension Agents, and PoPs must publish a half-yearly list of engaged agents on their websites. Nodal Officers are to be designated by PoPs for Pension Agent engagement and queries.