NPS changes: PFRDA asks pension funds to rename, restructure MSF schemes within 30 days

The Pension Fund Regulatory and Development Authority (PFRDA) has directed Pension Funds to modify, restructure or reclassify existing Multiple Scheme Framework (MSF) schemes to bring them in line with the standardised classification framework prescribed by the Authority.

The directions have been issued through Circular No. PFRDA/2026/48/REG-PF/11 dated August 28, 2026, on operationalising the framework for classification and presentation of schemes under NPS.

The modified details have to be submitted to the Authority within 30 days from the date of issue of the circular.

Existing MSF schemes will also have to be renamed in accordance with the prescribed naming convention within 30 days.

The circular provides that a Pension Fund can offer up to two schemes under each category under each Tier.

“If on the date of issue of this Circular, more than two Scheme exists within the same category, the Pension Fund shall merge/ subsume/ suitably restructure such Schemes within 45 days from the date of issue of this circular,” PFRDA said.

The process will have to be undertaken after duly informing subscribers and following the due process for winding up of the scheme.

For launching new MSF schemes, PFRDA has prescribed that every MSF scheme will require prior approval of the Authority.

“Every MSF Scheme shall require the prior approval of the Authority,” the circular states.

Pension Funds proposing to launch a new scheme will have to submit information, documents, declarations and undertakings as may be specified by the Authority.

MSF schemes will be available to eligible subscribers under Tier I and Tier II Accounts, subject to the provisions governing contributions, withdrawals and exits under the extant regulatory framework.

Every scheme will have to display a Risk-o-meter in the format specified by the Authority.

PFRDA has also directed every Pension Fund to prepare and maintain an “NPS Scheme Essentials” document for every MSF scheme. The document will include the scheme name, fund manager details, objective of the scheme, target segment, asset allocation pattern, risk level, benchmark, vesting period, charges and fees, risk management, taxation, winding-up provisions, subscriber communication and other information.

The circular also permits Pension Funds to offer value-added services, including income pay-out solutions, annuity-related services, succession planning and other retirement planning solutions, subject to the extant regulatory framework.

Such services will have to be disclosed to subscribers, will remain the responsibility of the Pension Fund, will be optional for subscribers and will not alter the investment objective or risk profile of the scheme.

Each scheme will also have to be benchmarked against relevant market indices for transparent performance disclosure.

In case of winding up of an MSF scheme, subscribers will be given a choice to opt for another scheme.

“Those subscribers who do not exercise their choice, would be migrated to the Life Cycle 50 – Moderate (10E/55Y) Scheme of the same Pension Fund under Tier I,” PFRDA said.

The circular also states that the distinction between Common Schemes and Multiple Scheme Framework (MSF) Schemes will stand discontinued.

“With effect from the date of this Circular, the distinction between Common Schemes and Multiple Scheme Framework (MSF) Schemes shall stand discontinued,” PFRDA said.

It further states that all schemes under NPS will thereafter be classified and governed under the framework prescribed through Circular No. PFRDA/2026/47/REG-PF/10 dated August 28, 2026.

The circular supersedes Circular No. PFRDA/2025/09/REG-PF/01 dated September 16, 2025.