BIG Relief For NPS Subscribers! Now You Can Put Your Entire Corpus in Equities with Just One Scheme

In a major relief for the National Pension System (NPS) subscribers, the Pension Fund Regulatory and Development Authority (PFRDA) is all set to roll out a Multiple Scheme Framework (MSF) from October 1, 2025. The recently launched framework allows subscribers to access multiple schemes under the NPS.

The MSF structure will give better flexibility, more specialised and personalised retirement solutions and alignment with global best practices in pension system design, according to a PFRDA circular released on Tuesday.

What Is Multiple Scheme Framework?

The MSF is the key for NPS subscribers to unlock opportunities of diversification, better flexibility and scope for personalisation in retirement solutions. It is a framework developed under the enabling provisions of Section 20(2) of the PFRDA Act, 2013. MSF allows subscribers to access multiple chemes under the NPS. It is seen as a big step in expanding the outreach of NPS in the NGS.

100% Allocation In Equities

One of the key features of the newly introduced MSF for NPS is the flexibility for subscribers to allocate of up to 100% of the NPS fund into high-risk category.

"Each scheme may have at least two variants, one moderate and one high-risk, with equity allocation allowed up to one hundred per cent in the high-risk category. PFs may also, at their discretion, introduce low-risk variants," read a statement in the press release.

Key Features of MSF Introduced Under NPS

From handling multiple schemes with a single PAN, to better investment options, the new MSF has significantly widened the scope for NPS subscribers. Here are its key features.

Ability to Handle Multiple Schemes

Subscribers will now have the ability to manage multiple schemes under a single PAN across various Central Recordkeeping Agencies (CRAs). Previously, only one scheme per tier was allowed. This new flexibility allows for better management of retirement savings.

Diversified Investment

With the implementation of MSF, pension funds can now offer schemes tailored for different groups including corporate employees, gig workers, self-employed professionals, etc. Each group will have at least two variants: moderate and high risk. High-risk schemes may allocate up to 100% in equities, offering greater potential returns.

Investors can diversify their strategies by balancing conservative and aggressive approaches within the same account. This alignment with individual life goals offers more control over retirement savings.

Better Features, Lower Price

These pension schemes will be available with lower annual charges. The annual charges for these schemes are capped at 0.30% of assets. Additionally, Pension Funds that attract mostly new subscribers will receive a 0.10% incentive, encouraging growth and participation in the NPS.

Subscribers will benefit from transparent reporting through consolidated scheme-wise and overall account statements provided via their Permanent Retirement Account Number (PRAN). This ensures clarity in tracking investments and performance.

Other than the new changes, existing exit rules remain intact. It is still mandatory for subscribers to purchase an annuity for lifelong income. Current NPS schemes will continue as "Common Schemes." Switching between new MSF schemes is permitted only after a 15-year vesting period or at normal exit.