Pension Scheme New Rule: What is the Multiple Scheme Framework in the Pension NPS? It will be implemented from October 1.

The National Pension System (NPS) will undergo a major change from October 1, 2025. The Pension Fund Regulatory and Development Authority (PFRDA) is implementing the Multiple Scheme Framework (MSF), which will allow non-government subscribers to choose between multiple schemes and 100% equity in a single PRAN.

The National Pension System (NPS) is a popular retirement savings scheme in India, in which millions of people invest their money. Now, a major change is about to take place in the NPS. The Pension Fund Regulatory and Development Authority (PFRDA) is introducing a new rule called the Multiple Scheme Framework (MSF). Yes, it will come into effect from October 1, 2025. Subscribers other than government employees (such as corporate employees, gig workers, and professionals) will have more options. So, let's understand in simple Hindi what the MSF is, what changes will occur, and what benefits it will bring.

What is NPS?

The National Pension System (NPS) is a self-selected investment scheme of the Government of India that provides pensions to citizens after retirement. It is administered by the Pension Fund Regulatory and Development Authority (PFRDA) and has two types of accounts: Tier-I (for pensions) and Tier-II (for voluntary investments).

What is the Multiple Scheme Framework (MSF)?

MSF means that non-government sector subscribers (such as those in private jobs, freelancers, gig workers) will now be able to invest in multiple schemes under a single PAN or PRAN (Permanent Retirement Account Number). Previously, a PRAN only covered one scheme, but now you can choose from multiple schemes and distribute your funds.

This framework will make the NPS more personalized and flexible. Pension Fund Managers (PFMs) will be able to launch new schemes, such as one for corporate employees and one for gig workers. Each scheme will have at least two variants: moderate risk and high risk. Up to 100% equity allocation will be possible in high-risk schemes.

What changes will occur from October 1, 2025?

Multiple Schemes: Multiple schemes can be held under one PRAN. This allows you to manage them through different Central Recordkeeping Agencies (CRAs) such as CAMS, Protean, or KFintech.

100% Equity: In high-risk schemes, your entire corpus can be invested in the stock market.

New Schemes: Pension funds will be able to launch new schemes, but PFRDA approval is required. Each scheme will be benchmarked to a market index.

Fee Cap: Annual fees will not exceed 0.30%. Funds bringing in new investors will now receive a 0.10% incentive.

Scheme Essentials Document: Each scheme will have a standard document detailing its objectives, risks, fees, switching rules, and more.

Old schemes will be called "common schemes." Switching will only be possible after the 15-year vesting period or upon normal exit. Exit rules remain the same: 60% must be invested in a mandatory annuity upon retirement.

Advantages of MSF

More Choice: You can choose a scheme based on your risk appetite. Gig workers or professionals will get personalized options.
Better Returns: Higher earning potential than 100% equity, but also higher risk.
Transparency: Benchmarking and documentation will ensure clarity.
Lower Fees: A 0.30% cap will reduce expenses.
Inclusiveness: This will make NPS more attractive to the gig economy and the private sector.

Some Challenges

Risk: High-equity schemes may suffer losses due to market declines.
Switching Limit: Changes are possible only after 15 years, so choose carefully.
PFRDA Approval: Approval of new schemes may take time.

How to join NPS?

• Eligibility: Indian citizens aged 18-70 (including NRIs), not HUFs or PIOs.
• Process: Register on the CRA portal, complete KYC. Open a Tier-1 (retirement) and Tier-2 (voluntary) account.
• Tax benefit: Up to 1.5 lakh exemption under Section 80C.

Final and important point

The implementation of MSF in NPS from October 1, 2025, will provide greater flexibility and choice to non-government subscribers. Multiple schemes in a single PRAN, 100% equity options, and lower fees will simplify retirement planning, but invest with an understanding of the risks. If you are in NPS, take advantage of the new rules. (Note: This news is based on general information)

5 FAQs

Q1. What is NPS?

NPS, or National Pension System, is a government retirement investment scheme administered by the Public Sector Undertaking (PFRDA).

Q2. What is the Multiple Scheme Framework (MSF)?

Under the MSF, non-government subscribers can choose multiple schemes and split their investments under a single PRAN.

Q3. When will the new rule come into effect?

The MSF rule will come into effect from October 1, 2025.

Q4. What does 100% equity mean?

If you choose a high-risk scheme, the entire corpus can be invested in the stock market.

Q5. Will there be tax benefits on NPS?

Yes, NPS offers tax exemption up to Rs 1.5 lakh under Section 80C.