New NPS deadline: Switch out of Scheme A (Tier 1) by December 25. Check benefits

The Pension Fund Regulatory and Development Authority (PFRDA) has issued an important update for subscribers to the NPS Scheme A (Tier-1). The regulator has decided to merge NPS Scheme A (Tier 1) with Schemes C and E in a bid to provide a "rewarding investment experience" to subscribers.

"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 in a notice dated December 13, 2025.

The regulator has also asked subscribers of Scheme A (Tier 1) to switch to any other asset classes under NPS by December 25, 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," PFRDA said.

NPS Scheme A provided for investment in alternative investment funds, including instruments like CMBS, MBS, REITS, AIFs, InvIts etc. Scheme E allows investments in equity and related instruments, while Scheme C allows investing in corporate debt and related instruments.

How will the merger benefit subscribers?

PFRDA said that merging Scheme A with Schemes C and E will ensure that your NPS contributions are invested in larger, diversified, and more liquid portfolios, enabling smoother management and more efficient long-term growth.

The regulator highlighted the following four distinct benefits for subscribers due to the merger of NPS Scheme A (Tier 1) with Scheme C and A:

The regulator said that Scheme A had a relatively small corpus and limited investment avenues. After the merger, your contributions will be part of larger and more diversified portfolios under Schemes C and E. This will also help reduce concentration risk and enhance stability.

"Larger schemes offer better flexibility and portfolio management efficiency, which supports more consistent long-term returns and a better balance between risk - reward for retirement investment," PFRDA said.

Certain assets under Scheme A involved longer lock-in periods. However, after the merger, investments will shift to schemes with higher liquidity, which will in turn facilitate smoother withdrawals and switches.

The PFRDA said that in the ongoing market reforms, the changes effected by the market regulator SEBI, and the simplification of asset classifications are reshaping investment frameworks. "This merger aligns NPS with evolving best practices, ensuring a more efficient and future-ready scheme structure."

What can NPS Scheme A subscribers do?

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 December 25, 2025 as per applicable guidelines.