The Pension Fund Regulatory and Development Authority (PFRDA) has approved a series of policy reforms aimed at promoting sustainable growth and strengthening governance in the National Pension System (NPS). The framework, which comes into effect in phases, is designed to enhance competition, safeguard subscriber interests, and expand coverage across corporate, retail, and gig-economy segments.
Under the new framework, Scheduled Commercial Banks (SCBs) will be permitted to independently sponsor and manage Pension Funds, subject to clearly defined eligibility criteria based on net worth, market capitalisation, and prudential soundness in line with RBI norms. The reforms aim to remove regulatory constraints that had previously limited bank participation in the NPS ecosystem. Detailed eligibility criteria will be notified separately and will apply to both new and existing Pension Funds.
PFRDA has also appointed three new Trustees to the Board of NPS Trust: Dinesh Kumar Khara, former Chairman of the State Bank of India, who has been designated Chairperson of the Board; Swati Anil Kulkarni, former Executive Vice President of UTI AMC; and Arvind Gupta, Co-Founder and Head of the Digital India Foundation and Member of the National Venture Capital Investment Committee under SIDBI’s Fund of Funds Scheme.
In addition, PFRDA has revised the Investment Management Fee (IMF) structure for Pension Funds, effective April 1, 2026. The new slab-based IMF introduces differentiated rates for government and non-government sector subscribers, while schemes under the Multiple Scheme Framework (MSF) will have separate corpus-based calculations. Government sector employees under the Composite Scheme, or those opting for Auto Choices and Active Choice G 100s, will continue to have the same IMF.
The revised IMF for non-government sector subscribers is as follows:
• Up to ₹25,000 crore AUM: 0.12%
• ₹25,000–50,000 crore AUM: 0.08%
• ₹50,000–1,50,000 crore AUM: 0.06%
• Above ₹1,50,000 crore AUM: 0.04%
The Annual Regulatory Fee (ARF) of 0.015% payable by Pension Funds to PFRDA remains unchanged, with 0.0025% of AUM earmarked for the Association of NPS Intermediaries (ANI) to carry out outreach, awareness, and financial literacy initiatives under PFRDA’s guidance.
“These reforms are aimed at creating a more competitive, well-governed, and resilient NPS ecosystem. By enhancing governance, expanding coverage, and aligning fees with international benchmarks, we expect improved long-term retirement outcomes and greater old-age income security for subscribers,” PFRDA said in a statement.
