Pension fund regulator PFRDA has made significant changes to the rules for Corporate NPS. Under the new provisions, employees can now invest up to 100% in risky equity funds within the Multiple Scheme Framework, but this feature applies only to additional voluntary contributions. Mandatory contributions previously agreed upon by the employer and employee cannot be transferred to this scheme.
Currently, the investment structure in Corporate NPS is based on a joint decision between the company and the employee. In many organizations, both contribute, while in some cases, only the employer contributes. PFRDA has clarified that the agreed-upon contributions cannot be changed under the new framework, so employees seeking higher returns will have to invest additional amounts separately.
What is the New Multiple Scheme Framework?
From October 1, 2025, PFRDA has allowed NPS members to invest in multiple schemes within a single tier account. This feature is available only to non-government (corporate) and all-citizen subscribers. Previously, investors were only allowed to choose one scheme in a tier, which limited investment options.
Investors can now invest simultaneously in various schemes such as equity, corporate bonds, and government securities. The new system allows employees to balance risk and safety.
New Freedom to Invest 100% in Equity
Previously, the maximum limit for equity investment in NPS was 75%. However, now high-risk investors can invest their additional voluntary amount entirely in equities. This will benefit employees who seek better returns over the long term and are willing to take market risk.
Although this does not apply to mandatory contributions, the company’s share or the employee’s basic contribution cannot be transferred to this riskier scheme.
Employer and Employee Consent Required
According to the new guidelines, the selection of a pension fund and investment scheme will require joint consent from both the employer and employee. Previously, in many companies, this decision was solely in the hands of the employer.
Now, it is mandatory to record this decision in writing. The chosen plan will be reviewed annually, and changes may be made if necessary.
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Employee Grievances
If an employee believes a pension fund or scheme has been chosen without their consent, they can file a complaint. A two-tier system has been implemented.
First, the employee must file a complaint with their organization’s HR department. If a resolution is not found there, the employee can then escalate the complaint directly to the Public Financial Institutions (PFRDA). This will increase transparency and give employees greater control over their investment decisions.