Introduction of Multiple Scheme Framework for Non-Government Sector Subscribers

[Logo: PFRDA] PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY

CIRCULAR

PFRDA/2025/09/REG-PF/01

Date: 16th Sep 2025

To

All Pension Funds All Central Recordkeeping Agencies NPS Trust All Points of Presence Trustee Bank Other stakeholders of NPS

Subject: Introduction of Multiple Scheme Framework (MSF) for Non-Government Sector Subscribers under NPS – Section 20(2) of PFRDA Act 2013

The Non-Government Sector (NGS) has emerged as a vibrant and dynamic pillar of the NPS, demonstrating consistent progress in both participation and asset growth. This sector reflects the growing confidence of India’s private workforce—including corporate employees, professionals, self-employed individuals, and digital economy (platform-based) workers—in securing their financial future through the NPS. While the journey so far has been highly encouraging, the true potential of this vast and diverse segment offers even greater opportunities for expansion and deeper engagement.

Recognizing the need to strengthen India’s pension landscape and to bring within its ambit a wider spectrum of contributors, the PFRDA is pleased to introduce the Multiple Scheme Framework (MSF). This framework has been developed under the enabling provisions of Section 20(2) of the PFRDA Act, 2013, which permits subscribers to access multiple schemes under the NPS. The reform is a significant step forward in expanding the outreach of NPS in the NGS, allowing greater flexibility, more personalized retirement solutions, and alignment with global best practices in pension system design.

2. Section 20 of PFRDA Act 2013

The framework is firmly anchored in the PFRDA Act, 2013, which establishes the statutory foundation for NPS. Section 20 of the Act provides for the creation of individual pension accounts, the portability of such accounts, the availability of multiple schemes and Pension Funds, and the requirement of annuity purchase at exit to ensure lifelong income. In addition, the PFRDA (Pension Fund) Regulations, 2015 require Pension Funds (PFs) to operate within the boundaries of prudential investment norms, to make full disclosures of risks and returns, and to maintain technological readiness for servicing subscribers.

The introduction of MSF envisages a pension system offering multiple choices, transparency, and efficiency. By bringing this framework into operation, the Authority is ensuring that innovation in pension design is balanced by strong safeguards for subscribers.

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3. Key Features of the Framework

The Multiple Scheme Framework is built upon a new architecture where a subscriber, identified uniquely through a Permanent Account Number (PAN) across CRAs, will be able to hold and manage multiple schemes within the NPS through PRAN at each CRA. This is a departure from the earlier structure where a subscriber could operate only a single investment choice per tier and associated with one CRA. By enabling multiple schemes under one identity of PAN, the framework removes constraints on diversification and provides subscribers with greater scope for aligning their investments with their evolving retirement and wealth building goals.

Under MSF, PFs are permitted to design schemes that are tailored to specific subscriber persona. These may include schemes for self-employed professionals, digital economy (platform-based) workers, or corporate employees where employer co-contributions are facilitated. Each scheme may have at least two variants, one moderate and one high-risk, with equity allocation allowed up to one hundred percent in the high-risk category. PFs may also, at their discretion, introduce low-risk variants.

The exit provisions, including annuitization requirements, will continue to be governed by the PFRDA (Exits and Withdrawals under the NPS) Regulations. The framework also introduces a transparent and consolidated reporting system at CRA, enabling subscribers to monitor their holdings both at the individual scheme level and in aggregate, through their PRAN. The accounts held by the Subscribers with more than one CRA can be accessed through Account Aggregator System through PAN and the annual Statement delivered by the designated CRA.

The cost structure has been designed to remain low, in keeping with NPS principles. The total charges are capped at 0.30 percent of Assets Under Management (AUM) annually, with an additional incentive of 0.10 percent allowed for PFs that attract more than eighty percent new subscribers to a scheme. This incentive is available for three years from the launch of a scheme or until it reaches fifty lakh subscribers, whichever is earlier. The detailed framework with parameters and contours for Section 20(2) Schemes applicable for NGS is attached as Annexure-I. CRA Annual charges for each scheme will continue to be collected by CRA as per prevailing norms as amended from time to time.

4. Benefits to Stakeholders

For subscribers, the MSF represents a major expansion of choice and personalization. It enables them to balance conservative and aggressive strategies within the same PRAN, to plan for different life stages with tailored schemes, and to access transparent and low-cost retirement savings products. For PFs, the framework opens opportunities for product innovation and market expansion, allowing them to design schemes suited to diverse groups and to compete on performance and service quality.

For the NPS ecosystem as a whole, the framework deepens outreach, enhances inclusivity, and strengthens the credibility of NPS as a globally benchmarked pension system. The illustrative chart containing PAN and PRAN under the proposed new framework attached for reference (Annexure II)

5. Operational and Compliance Provisions

The implementation of MSF will require coordinated system-level enhancements across PFs, CRAs, the Trustee Bank (TB), and Points of Presence (PoPs). The PAN will function as the unifying identifier, while the PRAN will continue as the operational account for transactions. The CRAs will be responsible for enabling multi-scheme operations whereas the TB will adapt its systems to segregate and transfer contributions in line with subscriber choices, while PoPs will upgrade their Subscriber interfaces for onboarding, switching, and exit services.

All schemes introduced by PFs under this framework will require prior approval from PFRDA. PFs must comply strictly with the Authority’s investment norms, maintain transparent disclosures through a standardized “NPS Scheme Essentials” document, and ensure benchmarking of schemes against relevant market indices. There is no change in existing schemes as on date, which will now be collectively referred to as “Common Schemes”.

This circular shall take effect from 1st Oct 2025, International Day of Older Persons and the day observed as NPS Diwas. All stakeholders are advised to make the necessary preparations for timely implementation and to submit progress reports to the Authority as required.

K MOHAN GANDHI Chief General Manager Regulation Fund Management Dept.

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Annexure I

Framework for new schemes designed by PFs under Section 20(2) under Multiple Scheme Framework (MSF)