National Pension System: PFRDA sweetens NPS with 100% equity option; FAQs explained

According to a PFRDA circular dated September 16, 2025, the proposed Multiple Scheme Framework (MSF) is a departure from the existing practice, where a subscriber is allowed to opt for only a single investment choice per tier and is associated with one CRA.

"The Multiple Scheme Framework is built upon a new architecture where a subscriber, identified uniquely through a Permanent Account Number (PAN) across CRAs, will be able to hold and manage multiple schemes within the NPS through PRAN at each CRA," the Pension Fund Regulatory and Development Authority (PFRDA) said.

"This is a departure from the earlier structure where a subscriber could operate only a single investment choice per tier and associated with one CRA," it added,

The regulator further said that by enabling multiple schemes under one PRAN, MSF will remove constraints on diversification and provide subscribers with a "greater scope for aligning their investments with their evolving retirement and wealth-building goals."

How will MSF benefit non-Government subscribers?

According to the regulator, the MSF represents a major expansion of choice and personalisation for non-Government subscribers.

The new provision will enable you to balance conservative and aggressive strategies within the same PRAN, to plan for different life stages with tailored schemes, and to access transparent and low-cost retirement savings products.

PFRDA Multiple Scheme Framework explained

How will it work?

"Under MSF, PFs (pension funds) are permitted to design schemes that are tailored to specific subscriber persona. These may include schemes for self-employed professionals, digital economy (platform-based) workers, or corporate employees where employer co-contributions are facilitated," the regulator said.

"Each scheme may have at least two variants, one moderate and one high-risk, with equity allocation allowed up to one hundred percent in the high-risk category. PFs may also, at their discretion, introduce low-risk variants," it added.

The circular allows pension fund managers to design risk-based schemes as following:

• Each category will have two risk variants - Moderate and High.

• Risk-profiling of subscribers will be based on income or socio-economic parameters to enable informed scheme selection.

• Pension funds will establish an audit mechanism through sample checks to mitigate mis-selling and maintain an audit trail for inspections.

• High-risk schemes may have equity exposure up to 100%.

• Introduction of a low-risk variant is left to the choice of pension funds.

Is there any change in exit provisions proposed?

No. The regulator said that the exit provisions, including annuitisation requirements, will continue to be governed by the PFRDA (Exits and Withdrawals under the NPS) Regulations.

It further said that the accounts held by the subscribers with more than one CRA can be accessed through the Account Aggregator System through PAN and the annual Statement delivered by the designated CRA.

What is the cost-structure?

The total charges are capped at 0.30% of Assets Under Management (AUM) annually, with an additional incentive of 0.10% allowed for pension funds that attract more than 80% new subscribers to a scheme.

What is the effective date for MSF implementation?

The MSF circular will take effect from October 1, 2025, which is also the International Day of Older Persons, and observed as NPS Diwas.