NPS Vatsalya: PFRDA grants pension funds control over investments, data access & allocation flexibility

The Pension Fund Regulatory and Development Authority (PFRDA) has issued a circular providing enhanced guidelines for pension funds under the NPS Vatsalya Scheme, granting them access to subscriber information and flexibility in asset allocation.

The circular, PFRDA/2026/09/REG-PF/03, dated 23rd February 2026, was addressed to all CEOs of Pension Funds, the CEO of NPS Trust, and all NPS stakeholders.

Sharing of subscriber information

The authority stated that “to provide structured subscriber insights such as geographical distribution, gender diversity, contribution behaviour and personalised communication, the requisite subscriber information under NPS Vatsalya shall be shared by the concerned CRAs with the respective Pension Funds.”

• Purpose limitation for scheme management, outreach, communication, and servicing.

• Adherence to data usage, privacy, and security provisions.

• Compliance with the Digital Personal Data Protection Act, 2023, the IT Act, 2000, and other applicable laws.

• Regulatory oversight, audit trails, inspections, and reporting as prescribed by the Authority.

The circular emphasised that “the regulatory framework is intended to enable PFs to actively promote and distribute the scheme through evidence-based outreach and promotional strategies; facilitate innovation and targeted engagement; strengthen scale and sustainability of NPS Vatsalya; enhance enrolment in alignment with regulatory objectives of transparency, subscriber protection, and inclusive NPS growth; support timely corrective measures; and facilitate objective performance assessment.”

Intermediaries are required to ensure that “their systems, data flows, access controls and compliance mechanisms are aligned with the above framework,” with breaches attracting appropriate regulatory action.

Asset allocation flexibility

“Pension Funds may, at their discretion, adopt the asset allocation pattern prescribed by the Authority with no minimum asset allocation requirement across various asset classes, or design and implement their own pattern, including allocations similar to schemes under MSF, with the option to allocate up to 100% into Equity,” the circular stated.

All allocation decisions must comply with the NPS Master Circular dated 10th December 2025, and funds opting for custom allocations are required to:

• Clearly disclose the pattern to subscribers at onboarding

• Publish it prominently on their websites in an easily accessible and understandable manner

PFRDA advised that pension funds “engage directly with their associated NPS Vatsalya subscribers regarding investment approach, asset allocation, risk characteristics, and scheme features to facilitate informed decision-making and enhance subscriber awareness.”