The Pension Fund Regulatory and Development Authority (PFRDA) has announced a major reform in the National Pension System (NPS) for the non-government sector. Starting October 1, 2025 – celebrated as ‘NPS Diwas’ – a Multiple Scheme Framework (MSF) will come into effect, offering subscribers more choice, transparency, and capped charges.This move is expected to benefit millions of corporate employees, self-employed individuals, professionals, and gig/platform workers by giving them diverse investment options under a single NPS account.
Below are the 7 key highlights of the new framework:
1. Multiple Schemes Under One NPS Account
Until now, non-government sector subscribers could invest in only one scheme per tier (Tier I and Tier II). The MSF will allow multiple investment schemes to be operated under a single Permanent Account Number (PAN), enabling greater diversification and personalization of retirement savings.
2. Tailored Plans for Different Subscriber Segments
The new framework is designed to address the diverse needs of corporate employees, professionals, self-employed individuals, entrepreneurs, and gig workers. PFRDA aims to introduce persona-targeted schemes to better match each subscriber’s risk appetite and retirement goals.
3. Risk Variants for Every Profile
Subscribers will now be able to select between moderate-risk and high-risk options (with up to 100% equity allocation in high-risk schemes). Pension Funds (PFs) may also offer low-risk options, ensuring there’s a suitable scheme for every type of investor.
4. Standardized Naming Convention for Schemes
To bring clarity and transparency, all schemes will follow a standard naming format, including “NPS + Objective”. This makes it easier for subscribers to understand each scheme’s purpose at a glance.
5. Capped Charges to Protect Subscribers
Charges for the new schemes will be capped at 0.30% of Assets Under Management (AUM) annually. An additional incentive of 0.10% will be allowed to PFs if 80% of their enrollments are new subscribers, valid for three years or until 50 lakh new enrollments are achieved.
6. Exit and Switching Provisions
Exit provisions will remain under existing PFRDA regulations. Subscribers can switch from new MSF schemes to common schemes, but switching between new MSF schemes will not be allowed until a 15-year vesting period (or until retirement/exit).
7. Mandatory Risk-o-Meter and Transparency Standards
Pension Funds must obtain PFRDA approval before launching new schemes. Each scheme will feature a Risk-o-Meter to disclose its risk level. Performance will be benchmarked against market indices, and a standard document titled “NPS Scheme Essentials” will detail each scheme’s objective, risks, charges, and benchmarks.
Why This Matters for NPS Subscribers
With MSF, subscribers can diversify their retirement savings across multiple schemes, choose a risk profile suited to their goals, and benefit from lower costs and greater transparency. This is a significant step toward making NPS more attractive, especially for the non-government sector workforce.
Conclusion
The PFRDA’s Multiple Scheme Framework under NPS is a landmark reform that empowers subscribers with flexibility, transparency, and cost efficiency. From October 1, 2025, non-government sector employees and self-employed professionals will be able to make more informed investment decisions and build a more secure retirement corpus.By aligning with global best practices and introducing risk-based schemes with capped charges, PFRDA is making NPS a truly inclusive and subscriber-friendly pension platform.
Read Also: NPS Partial Withdrawal Rules: Eligibility & Withdrawal Percentage Explained (2025 Update)
