This news brings a golden opportunity for millions of non-government employees and professionals investing in the National Pension System (NPS). The Pension Fund Regulatory and Development Authority (PFRDA) has announced significant changes to the rules, effective October 1, 2025, that will make your retirement planning smarter and more profitable than ever before. Until now, NPS allowed investments in only one scheme under a single PAN number.
However, under the new rules, you will now be able to invest in multiple schemes from a single NPS account. This Multiple Scheme Framework (MSF) will give you unparalleled freedom to fully control your retirement savings based on risk and return. Let’s understand this revolutionary change and its numerous benefits in detail.
A Great Change in Retirement Planning
Until now, NPS investors could invest in only one scheme (such as Auto Choice or Active Choice) based on their risk profile. However, with the implementation of MSF, this limitation will be removed. You will now be able to invest in multiple schemes offered by different pension funds, tailored to your needs and risk tolerance.
This major change means that if you want to take more equity exposure for higher returns, you can invest a portion of your portfolio in a scheme that allows up to 100% equity exposure. However, if you prefer a lower risk appetite, you can invest the remaining portion in a lower-risk scheme (such as government bonds). This new system provides you with the powerful tool of financial diversification, reducing your risk and increasing your return potential significantly.
Specialized Schemes for Corporate Employees and Professionals
This new and flexible system will give pension funds complete freedom to create specialized schemes for different groups based on market demand. For example, pension funds can now create schemes focused on stable and secure growth for corporate employees, while schemes focused on higher risk and higher returns can be launched for gig workers or young professionals.
This special scheme will ensure that every type of investor can find a perfect investment plan that suits their professional needs, income stability, and risk appetite. Furthermore, you will now receive a consolidated statement with complete information about all your investments, making it easy to understand where and how much your money is growing.
Promise of Expense Reduction and Transparency
This major change in NPS also includes a strong focus on reducing investment costs. The annual fee for pension funds has now been limited to 0.30%. This lower cost will directly increase your returns. Additionally, pension funds will be given a 0.10% incentive to attract new clients, which will enhance the quality and competitiveness of services.
In short, this new structure offers you a unique opportunity to invest according to your needs with more choice, better control, and lower costs.
However, you should keep in mind that the NPS exit rules remain unchanged. You will still be required to purchase an annuity after retirement, as before. If you wish to switch from one scheme to another, this option will be available only after completing 15 years or through normal exit. These rules, which will come into effect from October 1, 2025, are a milestone for anyone looking to make their retirement planning smarter and more profitable.